Marlena Evans, a Division Manager at the Salem Company, is considering a new investment for their division. The following data are available for the division and the new investment:

Current Investment

Average operating assets $200,000 $50,000

Operating income $30,000 $5,000

If the minimum rate of return on operating assets at Salem Company is 8% and the new investment is evaluated on the basis of residual income, then should Marlena accept the new investment opportunity?

Yes

No

Residual income will be the same with or without the new investment

Cannot be determined from the information provided