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Allenby Company has operating assets of $19,500,000. The companys operating income for the most recent accounting period was $2,600,000. The Fisher Division of Allenby controls

Allenby Company has operating assets of $19,500,000. The companys operating income for the most recent accounting period was $2,600,000. The Fisher Division of Allenby controls $8,260,000 of the companys assets and earned $1,210,000 of its operating income. Allenbys desired ROI is 9 percent. Allenby has $870,000 of additional funds to invest. The manager of the Fisher division believes that his division could earn $130,000 on the additional funds. The highest investment opportunity to any of the companys other divisions is 10 percent.

Required:
a.

Calculate the ROI of Fisher Division. (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

(1) Before investment opportunity.
(2) Only on the new investment opportunity.
(3) Fisher total ROI if investment opportunity is accepted.

ROI
(1) %
(2) %
(3) %

c-1.

Calculate Fishers residual income from the new investment opportunity. (Omit the "$" sign in your response.)

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