The manager of a division that produces sleeping bags, tents, and other camping gear is faced with the opportunity to invest in two independent projects. The first will provide the capability to produce a new type of camp stove. The second will provide the opportunity to produce a backpack, a product the division does not currently offer. Without the investments, the division will utilize assets for the coming year of $59 million and expected operating income will be $15 million. The cash outlay required for each investment and the expected operating income are as follows: Casey Stove Backpack Outlay $ 19,999,999 $ 4,999,999 Operating Income 1,399,999 949,999 Corporate headquarters has made available $15 million of capital for the camping goods division. Any funds not invested by the division will be retained by headquarters and invested to earn the minimum required rate of return of 19%. REQUIRED: [1} Calculate the EDI for each investment. [2} Calculate the divisional ROI for each of the following four alternatives: (a) Neither investment is made. {b} Camp stove investment is made only. (c) Backpack investment is made only. {de Both investments are made. [3} Assume divisional managers are evaluated and rewarded on the basis of ROI. Which alternative will the divisional manager choose? [4} Calculate the residual income for each investment