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  3. sunrise corporation has a roi of 13%. one of its d

Sunrise Corporation has a ROI of 13%. One of its divisions, which currently has a...

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Accounting

Sunrise Corporation has a ROI of 13%. One of its divisions, which currently has a 15% ROI and $750,000 of residual income (RI), is given the opportunity to invest in a project. The project will reduce the division's ROI but produce $120,000 of residual income. If Sunrise strives for goal congruence, the investment:

Multiple Choice

  • should not be acquired because the division's ROI and RI give different results

  • should not be acquired because the division's ROI is already higher than the overall corporation's ROI

  • should not be acquired as there is an opportunity cost to Sunrise

  • should not be acquired because it reduces divisional ROI

  • should be acquired because it produces an additional $120,000 of RI for the corporation

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