5. Jarrett Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $11,400,000 8,540,000 2,860,000 1,948,000 $912,000 $6,000,000 At the beginning of this year, the company has a $1,200,000 investment opportunity with the following characteristics: $2,400,000 Sales Contribution margin ratio Fixed expenses of sales 40% $744,000 The company's minimum required rate of return is 14%. Required: 1. What was last year's residual income? 2. What is the residual income of this year's investment opportunity? 3. If the company pursues the investment opportunity and otherwise performs the same as last year, what will be the overall residual income this year? 4. If Jarrett's CEO earns a bonus only if residual income for this year exceeds residual income for last year, would the CEO pursue the investment opportunity