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Can you please help with how to answer requirement 4 the last part I am confused. Thank you. @ E10-23A (similar to) 35 Question Help

Can you please help with how to answer requirement 4 the last part I am confused. Thank you.

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@ E10-23A (similar to) 35 Question Help a Anderson Ceramim, a division of Monette Corporation, has an operating income of $65,000 and total assets of $440,000. The required rate of return for the company is 14%. The company is evaluating whether it should use return on investment (ROI) or raidual income (RI) as a measurement of performance for its division managers. The manager of Anderson Ceramics has the opportunity to undertaim a new project that will require an investment of $160,000. This invatment would earn $19,200 forthe company. Read the @uirements. Requirement. 2. What would the ROI be for Andemon Ceramits if this investment opportunity were undertaken? Would the manager at the Anderson Ceramios division want to make this investment it she were evaluated based on ROI? Why or why not? (Enter the percentage to two decimal places) Ifthis investment opportunitywere undertaken, the ROI would be 14-2 Va. Ifthe manager ofthis division is evaluated based on ROI she would not want to make this investment. investing in the new orq'ect would decrease the division's ROI. Requirement 3. What is the ROI of the investment opportunity? Would the investment be desirable from the standpoint of Monette Corporation? Why or why not? (Enter the percentage to two decimal places.) The ROI ofthe investment opportunity is 12 Va. From the standpoint of Monette Corporation this investment is not desirable The ROI ofthe investment opportunity is less than Monetta's required rate of mtum. Requirement 4. What would the residual income (RI) be for Anderson Cemmics ii this investment opportunity were to be undertaken? Would the manager ofthe Anderson Ceramics division went to make this investment if she were evaluated based on Ri? Why or why not? First determine the formula to calculate the RI. Operating income 7 ( Total assets x Target rate of return ) = RI {Use parentheses or a minus sign for a negative RI.) The residual income (Ri) for Anderson Ceramics if this investment opportunity were to be undertaken is $ Enter any number in the edit elds and then click Check

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