1. Perfect Pucks, a division of Hockey Equipment Corp., has a net operating income of $63,000 and average operating assets of $300,000. The required rate of return for the company is 15%. What is the divisions residual income?

2. If the manager of the Perfect Pucks division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $16,500 per year?