A merchandising company is considering a $1,300,000 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 $650,000 and operating income will increase by $260,000 per year. If the company has a minimum required return on investment of 15.6%, what would be the residual income resulting from the upgrade?

Answer rating: 100% (QA)

Residual income is calculated as the difference between the operating income generated ... View the full answer