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M10-9 Impact of New Investment on ROI, Residual Income [LO 10-4,10-5] The Western Division of Claremont Company had net operating income of $150,000 and average
M10-9 Impact of New Investment on ROI, Residual Income [LO 10-4,10-5] The Western Division of Claremont Company had net operating income of $150,000 and average invested assets of $569,000. Claremont has a required rate of returr of 13.75 percent. Western has an opportunity to increase operating income by $46,000 with a s88,000 investment in assets Compute Western Division's return on investment and residual income currently and if it undertakes the project. (Enter your ROl answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Residual Income (Loss) answers to the nearest whole dollar.) Currently: Return on Investment Residual Income (Loss) roposed Project: Return on Investment ROI) Residual Income (Loss)
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