Jakobs Ladder has capital employed of ($10) million and currently earns an ROI of 15% per year.

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Jakobs Ladder has capital employed of $$10$ million and currently earns an ROI of 15% per year. It can make an additional investment of $$2$ million for a five-year life. The average net profit from this investment would be 14% of the original investment. The division's cost of capital is 12%. Calculate the residual income before and after the investment.

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