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q33 Hubbard Division of the Market Company has an opportunity to invest in a new project. The project will yield an incremental operating income of
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Hubbard Division of the Market Company has an opportunity to invest in a new project. The project will yield an incremental operating income of $41,750 on average invested assets of $455,000. Hubbard currently has operating income of $220,000 on average invested assets of $2,035,000. Market Company requires a 5% rate of return on new projects. a. What is Hubbard's ROI before making an investment in the project? (Round your answer to 2 decimal places.) Return on Investment % b. What is Hubbard's residual income before making an investment in the project? Residual Income c. What is Hubbard's ROI after making the investment in the project? (Round your answer to 2 decimal places.) Return on Investment % d. What is Hubbard's residual income after making the investment in the project? Residual IncomeStep by Step Solution
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