ROI, RI, measurement of assets. (CMA, adapted) Ashton Corporation recently announced a bonus plan to be awarded to the manager ofthe most profitable division. The three division managers are to choose whether ROI or RI will be used to measure profitability. In addition, they must decide whether investment will be measured using gross book value or net book value of assets. Ashton defines income as operating income and investment as total assets.

The following information is available for the year just ended:

Gross Book Accumulated Operating Division Value ofAssets Amortization Income Bristol $960,000 $516,000 $113,640 Darden 912,000 492,000 110,040 Gregory 600,000 336,000 73,680 Ashton uses a required rate ofreturn of 10% on investment to calculate RI.

Required Each division manager has selected a method of bonus calculation that ranks his or her divi¬

sion Number 1. Identify the method for calculating profitability that each manager selected, supporting your answer with appropriate calculations.