The Manager of Gamma Division Projects the Following for Next $\begin{array}{ll}\text { Sales } & \$ 100,000 \\\text { Operating income } & \$ 30,000 \\\text { Operating assets } & \$ 200,000\end{array}$

question 28

Multiple Choice

The manager of Gamma Division projects the following for next year:
The manager can invest in an additional project that would require $30,000 investment in additional assets and would generate $4,200 of additional income. The company's minimum rate of return is 12%.
$\begin{array}{ll}\text { Sales } & \$ 100,000 \\\text { Operating income } & \$ 30,000 \\\text { Operating assets } & \$ 200,000\end{array}$
-Refer to the Figure.What will happen to Gamma Division if the manager invests in the additional project?

• A)If the manager invests in the additional project, ROI of the division will increase.
• B)If the manager uses ROI to decide to invest, residual income of the project is less than the residual income of the division without the project; therefore, the project will be rejected.
• C)If the manager invests in the project, average investment for Alpha Division will decrease.
• D)If the manager invests in the additional project, residual income of the division will increase.

---

Definitions:

Paralanguage

The aspects of spoken communication that do not involve words themselves but rather tone, pitch, loudness, and other vocal qualities that convey meaning.

Time Language

The linguistic expressions and vocabulary related to describing or discussing aspects of time, including duration, sequences, or specific moments.

Gestures

Movements of the body or limbs that express or emphasize ideas or feelings.

Listening Ability

The capacity to accurately receive and interpret messages in the communication process, a crucial element of effective communication.