1. The companys required rate of return is 15%. Would the company want the manager of the Perfect Pucks division to make the investment of $100,000 that would generate additional net operating income of $16,500 per year? (Please show your work to justify your answer.)

2. 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?

3. 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?