The budgeted income of the division was $725,000 with operating assets of $3,625,000. The proposed investment would add income of…

The budgeted income of the division was $725,000 with operating assets of $3,625,000. The proposed investment would add income of $640,000 and would require an additional investment in equipment of $4,000,000. The minimum required return on investment for the company is 12%.