Sarah Allen operates a popular summer camp for elementary school children. Projections for the current year are as follows:

Sales revenue

Operating income

Average assets

$$8,520,000$

$$756,500$

$$4,304,000$

The camp's weighted$-$average cost of capital is $11\%,$ and Sarah requires that all new investments generate a return on investment of at least $15\%.$ The camp's current tax rate is $30\%.$

At last week's advisory board meeting, Sarah told the board that she had up to $$70,000$ to invest in new facilities at the camp and asked them to recommend some projects. Today the board's president presented Sarah with the following list of three potential investments to improve the camp facilities.

Incremental operating income

Average total assets

Playground

$ $2\mathrm{.}080$

$16,000$

Swimming Pool

$ $6,660$

$37,000$

Gym

$ $4,080$

$24,000$Calculate the return on investment, residual income, and economic value added for each of the three projects. $($Enter negative amounts using either a negative sign preceding the number, e$.$g$.-45$ or parentheses, e$.$g$.(45).$ Round Return on Investment answer to $2$ decimal places, e$.$g$.15\mathrm{.}25$ & all other answers to O decimal places, e$.$g$.15$ or $15\%.)$

Playground

Pool

Gym

Return on

Investment

$\%$

$\%$

$\%$

$

$

$

Residual Income

Economic Value

Added

$$

$