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Accounting

Wryski Corporation had net operating income of $150,000 and average operating assets of $500,000. The company requires a return on investment of 19%.

Required:

i. find out the company's current return on investment and residual income.

ii. The company is investigating an investment of $400,000 in a project that will generate annual net operating income of $78,000. What is the ROI of the project? What is the residual income of the project? Should the company invest in this project?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M942478

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