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What would be the residual income resulting from the upgrade

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Question - A merchandising company is considering a $700,000 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 $350,000 and operating income will increase by $140,000 per year. If the company has a minimum required return on investment of 8.0%, what would be the residual income resulting from the upgrade?

Reference no: EM133079978

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