Please type out the formula to each answer. Thank you.

Keenan Music $--$ ROI vs$.$ RI Case

Keenan Music's CEO has been pondering about the recent proposal of the Specialty Guitar Project. The accountant has done a capital budgeting analysis on the project

and outlined the conditions that this project would be acceptable. However, the CEO is concerned about the impact of accepting this project on the company's Return $($

Investment, which is a measure that is currently used in CEO's bonus contract. The CEO will receive extra bonus if the company's ROI improves from prior year. So$,$ the

accountant is asked to do a further analysis on this project.

The accountant has gathered the following information related to the Specialty Guitar Project and the company's financial information this year below:

Special Guitar Project

Annual Sales revenue

Contribution margin ratio

Annual fixed expenses

Required investment in assets

Keenan Music financial data this year

Sales revenue

Operating net income

Operating assets

Minimum required return

$1$ What is the annual operating net income for the Specialty Guitar?

Operating Net Income

$2$ Compute the margin, turnover, and Return on Investment $($ROI$)$ for Keenan Music this year, for the Specialty Guitar by itself, and for Keenan Music next year

assuming that the Specialty Guitar is added.

$3$

Compute the Residual Income $($RI$)$ for Keenan Music this year, for the Specialty Guitar by itself, and for Keenan Music next year assuming that the Specialty

Guitar is added.

Operating Net Income

Minimum Required Income

Residual Income