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Question(s) / Instruction(s):

. Wimmer Division's operating results include:

• Controllable margin, $150,000

• Sales revenue, $1,200,000

• Operating assets, $500,000

Wimmer is considering a project with sales of $120,000, expenses of $84,000, a controllable margin of $36,000, and an investment of $180,000. Wimmer's required rate of return is 15%.

Instructions

Determine whether Wimmer should accept this project using ROI. Show your computations and explain the reason for your conclusion.

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