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 $$725,000$ with operating assets of $$3,625,000.$ The proposed investment would add income of $$640,000$ and would require an additional investment in equipment of $$4,000,000.$ The minimum required return on investment for the company is $12\%.$

Required:

$1.$ Compute the ROI of the following $($round to the nearest whole percent$)$:

a$.$ The division if the radio project is not undertaken. fill in the blank $1$

$\%$

b$.$ The radio project alone. fill in the blank $2$

$\%$

c$.$ The division if the radio project is undertaken. fill in the blank $3$

$\%$

$2.$ Compute the residual income of the following:

a$.$ The division if the radio project is not undertaken. $fill in the blank $4$

b$.$ The radio project alone. $fill in the blank $5$

c$.$ The division if the radio project is undertaken. $fill in the blank $6$