5 (10 marks; 18 minutes) 1,0 During the recess period, you were detached at Log Support Formation. Upon your arrival, you were placed at procurement section with Maj Lorekang, the procurement officer. Maj Lorekang has just been presented with the opportunity to invest in two independent projects. The first is an air conditioner for the Mamba. The second is a turbocharger. Without the investments, the division will have average assets for the coming year of R28.9 million and expected operating income of R4.335 million. The outlay for each investment and the expected operating incomes are as follows: Outlay Operating income Air conditioner R750 000 R90 000 Turbocharger R540 000 R82 080 Log Support Formation sets a minimum required rate of return equal to 14%. Required: R1=01 5.1 Calculate the residual income for each of the following four alternatives: (8) a. The air conditioner investment is made. b. The turbocharger investment is made. C. Both investments are made. d. Neither additional investment is made. 5.2 Based on the results of 5.1 above, which project would you advise the manager to choose and why? (2)