Residual tricome and Investment Decislone Aliard, they peesented cwo years of data for its Frozen Foods Bivision and its Canned Foods ONisian. froxen foods Divisien Canned Division: The expected opersting incomes and the outiay required for each investment are as follows: company a minimim required rate of return, 7 percent. Required: 1. Compute the residual ineeme for each-of the opportunites. (Rocind to the nearest dollar.) 2. Compute the divisional residual income for each of the following four aiternatives: (Round to the nearest dollar.) a. The fulce box is added. b. The frult pouch is added. c. Both investments are added. 5 d. Neither investment is made; the status quo is maintained. $ Assuming that divisional managers are evaluated and rewarded on the basis of residual income, which alternative do you think the divisional manager will choose? 3. Assuming that management acts as you recommend in requirement 2 , compute the change in profit (loss) from the divisional manager's investment decision. Was the correct decision made