Business, 30.10.2019 05:31 MidnightAIY179

The plastics division of a manufacturing company is planning to purchase new equipment costing $100,000. they will dispose of old equipment with a book value of $10,000. no other changes in operating assets are expected. the new equipment is expected to increase operating income by $10,850. the company provided the following current information: current operating assets - $500,000controllable margin - 60,000minimum rate of return - 13% profit margin - 20%compute the original and new return on investment. would the manager choose to purchase the new equipment? a: yes, return on investment increases from 12% to 13%.b: no, return on investment decreases from 15.5% to 16.5%.c: yes, return on investment increases from 14.5% to 15.8%.d: no, return on investment decreases from 13.% to 12.%.

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