Frighot Limited has two investment centres. Mike is the manager of investment centre 1 and Lucy is the manager of investment centre 2. The following information relate to the two investment centres. Investment centre 1 Investment centre 2 Profit $40 000 $950 000 Invested capital $120 000 $1 200 000 Imputed interest rate 10% 10% Required: 1. Calculate residual income for the two investment centres. (2 marks) 2. Residual income only will be used to evaluate the performance of the two centres. Do you think this is a good idea? Explain. (2 marks) 3. Lucy has disclosed the net profit of Frighot Limited before the annual report became public. State whether she has broken any of the fundamental code of ethics and specify which one(s). (1 mark)