The Monarch Division of Allgood Corporation has a current ROI of $15$ percent. The company target ROI is $11$ percent. The Monarch

Division has an opportunity to invest $$3,300,000$ at $13$ percent but is reluctant to do so because its ROI will fall to $14\mathrm{.}40$ percent. The

present investment base for the division is $$7,700,000.$

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?