Last year a division of a major corporation had total sales of $26,110,000, net operating income of $1,801,590, and average operating assets of $7,000,000. The company's minimum required rate of return is 18%. An Investment in new equipment of $1,000,000 will result in a 15% increase in NOI. a. What is the division's residual income before the new investment? b. If the division manager is evaluated based on residual income, would he make the investment in new equipment? Why or why not? Show your computations! c. Would the company want the manager to make the new investment? Why or why not? Essay Toolbar navigation BIUS A **

Exer Hochanempon