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Management Studies

Economic Profit

Division A's ROI is 20%, and B's is 10%. The company pays each division manager a bonus based on his or her division's ROI. Discuss whether each division manager would accept or reject a proposed project with a rate of return of 15%. Would either of them make a different decision if the company evaluated managers using economic profit with a capital charge of 11%? Explain.

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9291020

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