Angie Corporation uses both ROI and residual income (RI) to measure performance. One of the company's divisions currently has $500,000 of capital invested in assets and is expected to earn operating income of $60,000 in the current period. The division is considering an investment in new equipment costing $80,000 that will likely increase its annual operating income by $3,800. The minimum ROI for all divisions within the company is 4%. 1. If the division does not purchase the equipment, its estimated ROI will be %. 2. If the division invests in the equipment, its ROI will likely decrease to %. 3. If the division does not purchase the equipment, its estimated RI will be $ . 4. If the division invests in the equipment, its RI will likely increase to $

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Calculating ROI and RI for Angie Corporations Division 1 ROI without new equipment ROI Operating Inc... View the full answer