division y of chardonnay currently has capital employed of $100,000 and earns an-凯发娱乐

division y of chardonnay currently has capital employed of $100,000 and earns an annual profitafter depreciation of $18,000. the divisional manager is considering an investment of $10,000 inan asset which will have a ten-year life with no residual value and will earn a constant annual profitafter depreciation of $1,600. the cost of capital is 15%.

calculate the following and comment on the results.

(i) the return on divisional investment before and after the new investment

(ii) the divisional residual income before and after the new investment