Q: 13
A company comprises several divisions.
One of these divisions was originally expected to earn an operating profit next year of $800,000 on
net assets of $4 million.
However, the divisional manager is considering investing in a project that would generate a project
return on investment (ROI) of 38% on additional net assets of $500,000.
What would be the divisional ROI next year if the project was implemented?
Give your answer to the nearest percentage.
Your Answer
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