Businesscorp Industries Corp Incorporated (BICI) is a decentralized firm with many autonomous divisions. The Business divisions NOI last year was $385,750 and the average value of its operating assets is $485,000.

The division is looking for a new project to invest in. They fund new projects with debt and have a cost of debt of 5.0%. The division determines whether a potential project is acceptable based its residual income.

If the Business division wants to invest $77,500 in a new project, what is the minimum amount of net operating income that the project must add to the division for the project to be worth investing in? (Please show/explain how you got your answer).