The Magazine Division of Continental Publishing Company had the following financial data for the year: Assets available for use $1,000,000 Book Value $1,500,000 Market Value Residual income $100,000 Return on investment 15% Refer to Continental Publishing Company. If the manager of the Magazine Division is evaluated based on return on investment, how much would she be willing to pay for an
investment that promises to increase net segment income by $50,000?
a. $ 50,000
b. $ 333,333
c. $1,000,000
d. $ 500,000
B
$50,000 / 0.15 = $333,333
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