Orange Corporation has two divisions: Fruit and Flower. The following information for the past year is available for each division:

Orange has established a hurdle rate of $10$ percent.

Required:

$1-$a$.$ Compute each division's return on investment $($ROI$)$ and residual income for last year.

$1-$b$.$ Determine which manager seems to be performing better.

Suppose Orange is investing in new technology that will increase each division's operating income by $$129,000.$ The total

investment required is $$2,100,000,$ which will be split evenly between the two divisions. Calculate the ROI and residual income for

each division after the investment is made.

Determine whether both managers will support the investment.