Large Company has several divisions, one of which is the Mini Division. Information pertaining to the division for the current fiscal year is as follows: Revenue: $350,000 Net Operating Income: $125,375 Average Operating Assets: $1,139,773 The Mini Division has identified a project that they could potentially take on. The project would require an additional $1,450,250 investment in operating assets and would generate an additional $75,350 of NOI for the division. The manager of the Mini Division earns a bonus based on the ROI of the Mini Division (i.e. if the Mini Division's ROI is higher, the manager earns a larger bonus). The manager is trying to decide whether or not to take on the project. Large Company can fund the project with either entirely debt or entirely equity, but not with a mix of both. The firm's cost of debt is 5.0% and their cost of equity is 8.0%. The firm requires that any project that a division takes on must earn (in expectation) more than the cost of funding. Required: 1. What is the return on investment (ROI) of the division without the new project? (Round to the nearest whole percent) 2. What is the return on investment (ROI) of the new project? (Round to the nearest whole percent) 3. What is the return on investment (ROI) of the division WITH the new project? (Round to the nearest whole percent) 4. What is the residual income of the project if Large Company decides to fund it with debt? (Round to the nearest whole dollar) 5. What is the residual income of the project if Large Company decides to fund it with equity? (Round to the nearest whole dollar) 6. Do you think that Large Company's shareholders would like to take on the project? 7. Do you think that the manager of the Mini Division would like to take on the project