7.7

Question 7 of 12 VI ew PS icies Curren t Attempt in Progress Paule Boothe. president oftwa Bramble Corporation. has mar-dated e minimum 6% return on investment for project undertaken Oy the cornparp,'_ Given the comp-erys decentralization. Peule leaves II investment decisions to the divisional manegers es long as they anticipate a minimum rate of return of at least The Energy Orinks division. under the direction of manager Martin Kh. has achieved e 15% return on irwestment forthe pest three years. This yea r is not expected to be different from the past three. Koch has just received e proposal to invest in e new line of energy drinVs that is expected to generate 5235.600 in operating Income. Calculate the residual income for the proposed new line of energy drinks. Residual income S eTextbaok and Media Attempts: O of 3 used If Maftin Kcch is evaluated based on residual income. will he cpcose to invest in the new line of energy drinks? eTextbaok and Media