E23-27 (similar to) Question Help Speed Auto Company operates a new car division (that sells high performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). Some division financial measures for 2017 are as follows: (Click the icon to view the data.) Read the requirements. New Car Division Performance Parts Division $ 2,250,000 2,550,000 S S 25,000,000 25,500,000 9.0 % 10.0 % Requirement 2. Calculate residual income (RI) for each division using operating income as a measure of income and total assets minus current liabilities as a measure of investment. (Use parentheses or a minus sign to enter residual losses.) New Car Division $ Performance Parts Division Measure of income 2,250,000 2,550,000 Imputed cost of investment $ 2,208,000 2,088,000 RI = $ 42,000 462,000 Requirement 3. William Abraham, the New Car Division manager, argues that the performance parts division has "loaded up on a lot of short-term debt" to boost its RI. Calculate an alternative RI for each division that is not sensitive to the amount of short-term debt taken on by the performance parts division. Comment on the result. (Use parentheses or a minus sign to enter residual losses.) Begin by calculating an alternative RI for each division that is not sensitive to the amount of short-term debt taken on by the performance parts division. = RI New Car Division Performance Parts Division Choose from any list or enter any number in the input fields and then click Check Answer. = = i Data Table Division New Car Performance Parts Division Total assets $ 25,000,000 $ 25,500,000 Current liabilities $ 6,600,000 $ 8,100,000 Operating income $ 2,250,000 $ 2,550,000 Required rate of return 12% 12%