The Basketball Division of Thunder Sports Enterprises reported the following financial data for the year: Assets available for use $1,200,000 Book Value $1,500,000 Market Value Residual income $108,000 Return on investment 14% Refer to Thunder Sports Enterprises. If the manager of the Basketball 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 $60,000?
a. $ 108,000
b. $ 300,000
c. $ 428,572
d. $1,200,000
C
$60,000 / 0.14 = $428,572
Business
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