0 Required information {The foiiowing information appiies to the questions dispiayed bellow] Wyalusing Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers' lots. Wyalusing expanded into the precut housing market when it acquired Fairmont Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers' lots for assembly. Wyalusing designated the Fairmont Division as an investment center. Wyalusing uses return on investment {ROI} as a performance measure with investment defined as average productive assets. Management bonuses are based in part on ROI. All investments are expected to earn a minimum return of 16 percent before income taxes. Fairmont's ROI has ranged from 29.2 to 32.4 percent since it was acquired. Fairmont had an investment opportunity in 2011 that had an estimated ROI of 28 percent. Fairmont's management decided against the investment because it believed the investment would decrease the division's overall ROI. The 20x1 income statement for Fairmont Division follows. The division's productive assets were $23,100,000 at the end of 20x1, a 5 percent increase over the balance at the beginning of the year. FAI MT DIV] SICN Income Statement For the YEar Ended December 31, 28x1 (in thousands) Sales revenue $59,530 Cost of goods sold 32.530 Gross margin $26,930 Operating expenses: Administrative $4,338 Selling 15,?85 26,165 Income from operations before income taxes 5 5.755 2. Would the management of Fairmont Division have been more likely to accept the investment opportunity it had in 20x1 if residual income were used as a performance measure instead of ROI? 0 Yes O No