An investment center of Southwick Corporation made three investment proposals. Details of the proposals follow.

Southwick Corporation uses the residual income method to evaluate all investment proposals. Its minimum rate of return is 15%.
1. As president of Southwick Corporation, which of the investments, if any, would you make? Why?
2. Assuming that Southwick uses the ROI approach to evaluate investment proposals, which investments, if any, would you make? (Southwick's current return on assets is20%.)

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Proposals 2 3 Required investment Annual return $80,000 $50,000 $65,000 13,000 9,500