ROI, RI, measurement of assets. (CMA, adapted) Leeds Corporation recently announced a bonus plan to be awarded to the manager of the 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. Leeds defines income as operating income and investment as total assets. The following information is available for the year just ended:

Leeds uses a required rate of return of 12% on investment to calculate RI.
REQUIRED Each division manager has selected a method of bonus calculation that ranks his or her division Number 1. Identify the method for calculating profitability that each manager selected, supporting your answer with appropriate calculations.LO1

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Gross Book Value Division of Assets Net Book Value of Assets Operating Income Dales $500,000 $300,000 $61,000 Reeds $520,000 $330,000 $66,000 Holms $275,000 $250,000 $35,000