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A company has two divisions X and Y which are both considering new investments costing $100,000. The company's cost of capital is 12%. The project being considered by X will produce a net annual return of $15,000, that being considered by Y will produce a net annual return of $11,000. Currently, the divisions are appraised by Return on Investment; X is achieving 17% and Y 9%. The company as a whole will benefit if: A. Only X's project is done. B. Both projects are done. C. Neither project is done. D. Only Y's project is done. |