Alpha Division
Alpha Division Had the Following Information -Refer to Alpha Division

Alpha Division
Alpha Division had the following information: $$\begin{array} { l l } \text { Asset base in Alpha Division } & \$ 800,000 \\\text { Net income in Alpha Division } & \$ 100,000 \\\text { Cost of capital } & 12 \% \\\text { Target ROI } & 15 \% \\\text { Margin for Alpha Division } & 20 \%\end{array}$$
-Refer to Alpha Division. Suppose the asset base is decreased by $200,000, with no other changes. What would be the return on investment?

A) 16.7%
B) 62.5%
C) 100.0%
D) 600.0%

Correct Answer:

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