1. The following data refers to the Daniels division of Tippett Inc. Daniels sells variablespeed drills. The standard drill sells for $ 40, and Daniels plans to sell 30,000 units in 2017. Tippett treats Daniels as an investment center with a total attributable investment of $ 800,000. Daniels' annual fixed costs are $ 200,000. Variable cost per standard drill is $ 24. The firm's required rate of return on investment is 15%.

1.1 What is the expected Return on Investment in 2017?

1.2 What is the expected residual income for Daniels in 2017?

1.3 A special order from a unit of the US Government has been received to buy from Daniel 10,000 units every year of the device at the price of $30 each. If the order is accepted, Daniels will have to incur additional annual fixed costs of $30,000 for administration and $150,000 to modify and expand the manufacturing facilities.

Based on the effect on ROI and/or Residual Income for the first year, will the manager accept this order? Why and why not?

ANSWER FOR 1.2 IS 160,000 AND 1.3 ROI will decrease but RI>0

PLEASE SOLVE STEP BY STEP AND SHOW HOW YOU GET THESE ANSWERS. I DONT UNDERSTAND THE QUESTIONS.