Division a Is Considering a Project That Will Earn a Rate

question 55

Multiple Choice

Division A is considering a project that will earn a rate of return that is greater than the required return on operating assets, but less than the division's ROI. Division B is considering a project that will earn a rate of return that is greater than the division's ROI, but less than the required return on operating assets. If the objective is to maximise residual income, would these divisions accept or reject their projects.
$\begin{array}{cc} \text { Division A}& \text {Division } B\\\end{array}$
A. $\begin{array}{cc} \text {Accept}& \text { Accept}\end{array}$
B. $\begin{array}{cc} \text {Reject}& \text { Accept}\end{array}$
C. $\begin{array}{cc} \text {Reject }& \text {Reject}\end{array}$
D. $\begin{array}{cc} \text {Accept}& \text { Reject}\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Anti-Americanism

A sentiment that opposes American politics, culture, or people, often resulting from political disagreements, cultural differences, or historical conflicts.

Vietnam War

A prolonged conflict from 1955 to 1975 between North Vietnam, supported by its communist allies, and South Vietnam, backed by the United States, resulting in a North Vietnamese victory.

United States

A federal republic in North America comprising 50 states, known for its significant impact on global politics, economy, and culture.