Calculate current residual income and new residual income

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Reference no: EM13775574

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

Reference no: EM13775574

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