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Dave Inc.'s cost of capital is 13%. The company has provided you with a summary of its annual reports from two of its divisions: Capital invested Net income Division A $4,750 $2,175 Division B $8,100 $2,500 The manager of Division B is considering a proposal for a new investment that will have the following incremental income and assets over the coming year: Income - $415 Assets - 2,525 If the proposal were accepted, what would Division B's ROI be? Enter your answer as a number with two decimal places. For example, 35% becomes 0.35.

Dave Inc.'s cost of capital is 13%. The company has provided you with a summary of its annual reports from two of its divisions: Capital invested Net income Division A $4,750 $2,175 Division B $8,100 $2,500 The manager of Division B is considering a proposal for a new investment that will have the following incremental income and assets over the coming year: Income - $415 Assets - 2,525 If the proposal were accepted, what would Division B's ROI be? Enter your answer as a number with two decimal places. For example, 35% becomes 0.35.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Dave Inc.'s cost of capital is 13%. The company has provided you with a summary of its annual reports from two of its divisions: Capital invested Net income Division A $4,750 $2,175 Division B $8,100 $2,500 The manager of Division B is considering a proposal for a new investment that will have the following incremental income and assets over the coming year: Income - $415 Assets - 2,525 If the proposal were accepted, what would Division B's ROI be? Enter your answer as a number with two decimal places. For example, 35% becomes 0.35.
Transcribed Image Text:Dave Inc.'s cost of capital is 13%. The company has provided you with a summary of its annual reports from two of its divisions: Capital invested Net income Division A $4,750 $2,175 Division B $8,100 $2,500 The manager of Division B is considering a proposal for a new investment that will have the following incremental income and assets over the coming year: Income - $415 Assets - 2,525 If the proposal were accepted, what would Division B's ROI be? Enter your answer as a number with two decimal places. For example, 35% becomes 0.35.
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