Division managers of Sandoval Incorporated are delegated decision-making authority over sales activities, costs incurred, and investments made in plant and equipment. They are considered investment centers for performance evaluation. Division A reported the following results from last year's operations Sales Variable xp $13,200,000 490,000 4,710,000 Contribution margin 3.46.000 Net operating income $1.224.000 Average operating $6,000,000 At the beginning of this year, Division A has an opportunity to invest $1,000,000 in a project with the following characteristics Estimated anual sales Contribution margin ratio $3,400,000 50% of sales Additional fixed expenses $ 1,524,000 Sandoval's minimum required rate of retum is 17% Required 1. What was the return on investment (ROD) in the prior year? 2. What was last year's residual income? 3. If Division A purvues the investment opportunity and otherwise performs the same as l year, what will be the ROI for the year? If Division A pursues the investment opportunity and otherwise performs the same al , what will be the residual income for the year? sin ir Sandeval's division managers earn a bonus only if ROI for this your exceeds ROI for last year, would the manager pursue the investment opportunity? If Sandoval's division managers earn a bonus only if residual income for this year econds residual income for last year, would the manager purse the investment opportunity? 7. From the company's perspective, do you think the invent pportunity should be pund? Why why not?