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Vernon Home Maintenance Company earned operating income of $6,226,500 on operating assets of $59,300,000 during Year 2 . The Tree Cutting Division earned $1,113,560 on
Vernon Home Maintenance Company earned operating income of $6,226,500 on operating assets of $59,300,000 during Year 2 . The Tree Cutting Division earned $1,113,560 on operating assets of $6,790,000. Vernon has offered the Tree Cutting Division $2,170,000 of additional operating assets. The manager of the Tree Cutting Division believes he could use the additional assets to generate operating income amounting to $444,850. Vernon has a desired return on investment (ROl) of 8.50 percent. Required a. Calculate the return on investment for Vernon, the Tree Cutting Division, and the additional investment opportunity. b. Calculate the residual income for Vernon, the Tree Cutting Division, and the additional investment opportunity. Complete this question by entering your answers in the tabs below. Calculate the return on investment for Vernon, the Tree Cutting Division, and the additional investment opportunity. Note: Round your answers to 2 decimal places. (i.e., 0.2345 should be entered as 23.45). Calculate the return on investment for Vernon, the Tree Cutting Division, and the additional investment opportunity. Note: Round your answers to 2 decimal places. (i.e., 0.2345 should be entered as 23.45 ). Calculate the residual income for Vernon, the Tree Cutting Division, and the additional investment opportunity
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