The Management of Mullen Division Has Provided the Following Information

Multiple Choice

The management of Mullen Division has provided the following information:
Total assets: $600,000
Operating income: $90,000
Sales: $300,000
Management is considering investing in an additional project costing $60,000; it is estimated that the project will create operating income of $7,200. Mullen's minimum acceptable rate of return is 10%. Which of the following statements is incorrect?

A) The impact of the investment on Mullen's capital turnover can't be determined given the information provided.
B) Mullen's residual income will increase if the investment in the project is made.
C) Mullen's return on investment will increase if the investment in the project is made.
D) Mullen's residual income will increase because the project's return on investment exceeds the minimum acceptable rate of return.