Perry Corporation is composed of three operating divisions.Overall,the Perry Corporation has a return on investment of 20%.Division A has a return on investment of 25%.If Perry Corporation.evaluates its managers on the basis of return on investment,how would the Division A manager and the Perry Corporation president react to a new investment that has an estimated return on investment of 23%?
$\text {\underline{Division A } }$ $\text {\underline{Perry Corporation President } }$
$\text {\underline{Manager } }$

A)accept accept
B)accept reject
C)reject accept
D)reject reject

Question

Perry Corporation is composed of three operating divisions.Overall,the Perry Corporation has a return on investment of 20%.Division A has a return on investment of 25%.If Perry Corporation.evaluates its managers on the basis of return on investment,how would the Division A manager and the Perry Corporation president react to a new investment that has an estimated return on investment of 23%?
$\text {\underline{Division A } }$                       $\text {\underline{Perry Corporation President } }$
$\text {\underline{Manager } }$

A)accept accept
B)accept reject
C)reject accept
D)reject reject

Quizplus · Accepted Answer

The Division A manager would reject the investment because its return of 23% is lower than Division A's current return of 25%, potentially lowering the division's overall performance. The Perry Corporation president would accept the investment because its return of 23% is higher than the corporation's overall return of 20%, thereby improving the corporation's overall performance.

Perry Corporation Is Composed of Three Operating Divisions Division A ‾ \text {\underline{Division A } }Division A ​

Perry Corporation Is Composed of Three Operating Divisions $\text {\underline{Division A } }$