Herb Huskie currently has an ROI of 16%, average operating assets of $1,500,000 and NOI of $240,000. The minimum required rate of return is 10%. Huskie can make an investment of $250,000 for a new project that would generate a NOI of $30,000. Using residual income, would Huskie make this investment?

Multiple Choice

• Yes, the total residual income for Huskie would increase by $5,000.

• Yes, the total residual income for Huskie would increase by $10,000.

• No, the total residual income for Huskie would decrease by $5,000.

• No, the total residual income for Huskie would decrease by $10,000.