Zachary Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 Sales revenue $ 105,780 Cost of goods sold 59,575 Gross margin 46,205 Operating expenses Selling expenses (2,810) Depreciation expense (4,025) Operating income 39,370 Nonoperating item Loss on sale of land (4,800) Net income $ 34,570 BOWMAN DIVISION Balance Sheet As of December 31, Year 2 Assets Cash Accounts receivable Merchandise inventory Equipment less accumulated depreciation Nonoperating assets Total assets Liabilities Accounts payable Notes payable Stockholders' equity Common stock Retained earnings $ 12,622 40,436 36,000 90,338 9,800 $ 189, 196 $ 9,577 66,000 74,000 39,619 90,338 9,800 $ 189, 196 Equipment less accumulated depreciation Nonoperating assets Total assets Liabilities Accounts payable Notes payable Stockholders' equity Common stock Retained earnings Total liabilities and stockholder's equity $ 9,577 66,000 74,000 39,619 $189,196 Required c. Calculate the ROI for Bowman. d. Zachary has a desired ROI of 10 percent. Headquarters has $90,000 of funds to assign to its investment centers. The manager of the Bowman Division has an opportunity to invest the funds at an ROI of 12 percent. The other two divisions have investment opportunities that yield only 11 percent. Calculate the new ROI for Bowman division, if the investment opportunity is adopted by Bowman. e. Based on the original data, calculate the original residual income. Also, calculate the new residual income based on information provided in Requirement d