The following information is provided: $\begin{array}{crc}
\text { Froject } & \text { Income } & \text { Investment } \
\mathrm{A} & £ 33,000 & £ 300,000 \
\mathrm{~B} & 56,250 & 750,000 \
\mathrm{C} & 27,500 & 550,000
\end{array}$ Assume the division's current ROI is 10 per cent and the firm's minimum required rate of return is 7 per cent. If you were the president of the company, which projects would you want the division manager to accept?
A)Projects A, B, and C
B)Projects A and C
C)Projects A and B
D)Project A only

Question

Quizplus · Accepted Answer

The ROI for each project is calculated as (Income / Investment). For Project A, it's $33,000 / 300,000 = 11\%$, for Project B, it's $56,250 / 750,000 = 7.5\%$, and for Project C, it's $27,500 / 550,000 = 5\%$. Projects A and B have ROIs above the firm's minimum required rate of return of 7%, while Project C's ROI is below this threshold. Therefore, Projects A and B should be accepted.

The Following Information Is Provided Assume the Division's Current ROI Is 10 Per Cent and \text