The following data refer to the successful Micro division of Drillex, Inc. Micro makes and sells high-end cordless drills. The dri sell for $65 each, and Micro expects sales of 200,000 units in 2019. Micro's annual fixed costs are $2 million. The variable co per drill is $40. Drillex evaluates Micro based on residual income. The total investment attributed to Micro is $14 million, and Drillex has a required rate of return on investment of 10%. Ignore taxes and depreciation expense. Answer each of the following parts independently, unless otherwise stated. Required Requirement 1. What is the expected residual income in 2019? (Round your answer to the nearest whole dollar.) The expected residual income in 2019 is $ Requirement 2. Micro receives an external special order for 60,000 units at $52 each. If the order is accepted, Micro will have to incur incremental fixed costs of $650,000 and invest an additional $1,600,000 in various assets. What is the effect on Micro's residual income of accepting the order? (Round your answer to the nearest whole dollar. Enter positive amounts only.) Micro's residual income would by $ if the order was accepted. Requirement 3. One of the components Micro manufactures for its drill has a variable cost of $3.2. An outside vendor has offered to supply the 200,000 units required at a cost of $4.5 per unit. If the component is purchased outside, fixed costs will decline by $120,000 and assets with a book value of $680,000 will be sold at book value. Will Micro decide to make or buy the component? Explain your answer. (Round your answer to the nearest whole dollar. Enter positive amounts only) Accepting this offer Micro's residual income by $ Micro will, therefore, decide to Requirement 4. One of Micro's regular customers asks for a special drill made of tempered steel. The customer requires 10,000 drills. Micro estimates its variable cost for these special units at $56 apiece. Micro will also have to undertake new investment of $1,000,000 to produce the drills. What is the minimum selling price that will make the deal acceptable to Micro? (Round your answer to the nearest cent.) The minimum selling price that will make the deal acceptable to Micro is Requirement 5. Assume the same facts as in requirement 4. Also suppose that the customer has offered $82 for each special drill. In addition, the customer has indicated that its purchases of the existing product will drop by 6,500 units. a. What is the net change in Micro's residual income from taking the offer, relative to its planned 2019 situation? (Round your answer to the nearest whole dollar.) by $ Micro's residual income would be as a result of the transaction related to the special tempered steel drills. b. At what drop in unit sales of the regular drill would Micro be indifferent to the offer? (Round your answer to the nearest whole number.) The drop in unit sales of the regular drill that would leave Micro indifferent to the offer is units