The Bishop Division of Kingley Corporation has a current ROI of 19 percent. The company target ROI is 13 percent. The Bishop Division has an opportunity to invest $4,600,000 at 17 percent but is reluctant to do so because its ROI will fall to 18.24 percent. The present investment base for the division is $7,500,000.
Required
Calculate the current residual income and new residual income, if new Investment opportunity is adopted.
I figured out that the current residual income is 450,000, but I can't get the new residual income