QUESTION 5 Bernadette Incorporated reported the following results from last year's operations: Sales $11,400,000 Variable expenses 8,540,000 Contribution Margin $2,860,000 Fixed Expenses 1,948,000 NOI $912,000 Average Operating Assets $6,000,000 At the beginning of this year, the company has a $1,300,000 investment opportunity with the following characteristics: Sales $2,650,000 Contribution Margin Ratio 35% of sales Fixed Expenses $714,000 Company's minimum required rate of return 14% Required: Show your work 1. What was last year's residual income? 14 points 2. What is the residual income of this year's investment opportunity? 3. If the company pursues the investment opportunity and otherwise performs the same as last year, what will be the overall residual income this year? 4. If the CEO earns a bonus only if residual income for this year exceeds residual income for last year, would the CEO pursue the investment opportunity 5. What is the turnover related to this year's investment opportunity? (Round to the nearest 0.01.) 6. What is the ROI related to this year's investment opportunity? (Round to the nearest 0.1%.)