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:

Common Organization

A typical structure or arrangement within a group or institution where roles and responsibilities are defined.

Résumé

A résumé is a document that summarizes an individual's work experience, education, skills, and accomplishments, typically used for job applications.

Chronological

Often used in resumes to list work experience or education in order from most recent to oldest.

Combination Résumé

Format that includes the best features of the chronological and functional approaches.