The Monarch Division of Allgood Corporation has a current ROI of $14$ percent. The company's target ROI is $10$ percent. The Monarch Division has an opportunity to invest $$5,400,000$ at $12$ percent but is reluctant to do so because its ROI will fall to $13\mathrm{.}20$ percent. The present investment base for the division is $$8,100,000.$

Required

a$.$ Calculate the current residual income and the residual income with the new investment opportunity being included.

b$.$ Based on your answers to requirement a$,$ should Monarch Division make the investment?

a$.$ Current residual income

a$.$ New residual income

b$.$ Should Monarch Division make the investment?