What would be the residual income resulting from the upgrade

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Question 1: A merchandising company is considering a $850,000 upgrade to its retail and warehousing facilities that will allow the company to handle more products and attract more customers. The company anticipates that sales will increase by $425,000 and operating income will increase by $170,000 per year. If the company has a minimum required return on investment of 10.0%, what would be the residual income resulting from the upgrade?

Reference no: EM132582969

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