The Following Information Is Provided: Assume the Division's Current ROI

question 3

Multiple Choice

The following information is provided: Assume the division's current ROI is 10 percent and the firm's minimum required rate of return is 8 percent.
If you were the division manager and you were evaluated based on ROI, which projects would you accept?

• A) Projects A, B, and C
• B) Projects A and C
• C) Projects A and B
• D) Project A only

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Definitions:

Capital Budgeting

The process of analyzing the needs of the business and selecting the assets that will maximize its value.

Working Capital Management

The process of managing a company's short-term assets and liabilities to ensure it has sufficient liquidity to run its operations effectively.