The division manager of HFD Inc., was debating the merits of a new product-a toy drone with a flying radius of 25 feet. The budgeted income of the division was $725,000 with operating assets of $3,925,000. The proposed investment would add income of $640,000 and would require an additional investment in equipment of $4,000,000. The minimum required return on investment for the company is 15%. Required: Download Excel spreadsheet 1. Compute the ROI of the following (round to the nearest whole percent): a. The division if the drone project is not undertaken. % b. The drone project alone. c. The division if the drone project is undertaken. 2. Compute the residual income of the following: a. The division if the drone project is not undertaken. b. The drone project alone. c. The division if the drone project is undertaken. 96 % 3. This depends on whether Leslie's division is evaluated on the basis of ROI or on the basis of residual income. Overall division ROI will the investment. On the other hand, residual income for the project is income, the project will be 4. How would you reconcile the seemingly opposing results using ROI and residual income? Aside from divisional performance and management evaluations, firms expectations, position of the product in the product life cycle and so on. and will ; so if ROI is the basis for evaluation, the division manager will overall residual income. If the division is evaluated on the basis of residual have disparate goals on many factors including industry, corporate objectives, shareholder and market