eBook Show Me How Return on investment and Investment Decisions Leslie Blandings, division manager of Audiotech Inc., was debating the merits of a new product a weather radio that would put out a warning if the county in which the listener lived were under a severe thunderstorm or tornado alert. The budgeted Income of the division was $975,000 with operating assets of $5,925,000. The proposed investment would add income of $640,000 and would require a additional investment in equipment of $4,000,000. The minimum required return on investment for the company is 120. Required: 1. Compute the rol of the following (round to the nearest wholt percent): a. The division of the radio project is not undertaken b. The radio project alone c. The division of the radio project is undertaken 2. Compute the residual income of the following: a. The division the radio project is not undertaken. D. The radio project alone c. The division in the radio project is undertaken. of ROTI 3. This depends on whether Leslie's division is evaluated on the basis of Rot or on the basis of residual income Overall division of wills decrease the investment. On the other hand, residual income for the project is positive and will raise the basis for evaluation, she will decline Vaara residual income. If the division is evaluated on the basis of residual income, the project will be accepted DI! Feedia