The Foundational $15($Algo$)[$LO$11-1,$ LO$11-2]$

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Westerville Company reported the following results from last year$$s operations:

Sales $ $1,900,000$

Variable expenses $550,000$

Contribution margin $1,350,000$

Fixed expenses $875,000$

Net operating income $ $475,000$

Average operating assets $ $1,187,500$

At the beginning of this year, the company has a $$237,500$ investment opportunity with the following cost and revenue characteristics:

Sales $ $380,000$

Contribution margin ratio $50\%$ of sales

Fixed expenses $ $133,000$

The company$$s minimum required rate of return is $10\%.$

Foundational $11-13($Algo$)$

$13.$ If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year?