Consider the following information for Executive Electronics:

Required
a. Evaluate the company in terms of residual income (RI), which is equivalent to EVA since there are no adjustments for accounting distortions.
b. While income has increased in fiscal 2018, is it clear that the company's performance has improved?
c. (Optional) Explain why the required rate of return increased in fiscal 2018.

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12/31/2017 12/31/2018 Total assets Noninterest-bearing current liabilities Net income Interest expense Тах rate Required rate of return $12,100,000 572,000 880,000 330,000 40% $12,650,000 770,000 2,310,000 40% 10% 12%