2) The Jazz Division of Heights Recording Corporation had the following results last year.

Sales	$10,000,000
Operating income	$2,200,000
Total assets	$4,000,000
Current liabilities	$2,500,000

Management's target rate of return is 12% and the weighted average cost of capital is 9%. Its effective tax rate is 40%.

Required:

Calculate the return on investment (ROI).

Calculate the residual income.