Paula Boothe, president of the Marigold Corporation, has mandated a minimum $6\%$ return on investment for any project undertaken

by the company. Given the company's decentralization, Paula leaves all investment decisions to the divisional managers as long as they

anticipate a minimum rate of return of at least $8\%.$ The Energy Drinks division, under the direction of manager Martin Koch, has

achieved a $16\%$ return on investment for the past three years. This year is not expected to be different from the past three. Koch has

just received a proposal to invest $$1,980,000$ in a new line of energy drinks that is expected to generate $$224,900$ in operating

income.

$($a$)$

Calculate the residual income for the proposed new line of energy drinks.

Residual income $