5. A division in a large company is an investment center, and currently has an annual operating income of $24 million and average operating assets of $200 million. The manager of the investment center is looking at a project which requires an additional investment of $60 million in operating assets and will increase operating income by $6 million. The manager of the division is evaluated by the company's top management based on his center's Return on Investment (ROI). The manager will therefore: (1 Point) Reject the additional investment as it will reduce the ROI of his center Be indifferent to whether to take the additional investment or not as it will not change the ROI of his center Accept the additional investment as it will increase the ROI of his center We do not have enough information to know whether the additional investment will increase or decrease the ROI of the center 7. A division in a large company is an investment center, and currently has an annual operating income of $24 million and average operating assets of $200 million. The manager of the investment center is looking at a project which requires an additional investment of $60 million in operating assets and will increase operating income by $6 million. The manager of the division is evaluated by the company's top management based on his center's Residual Income (RI). The minimum required rate of return of the company is 8%. The manager will therefore: M (1 Point) Reject the additional investment as it will reduce the RI of his center Be indifferent to whether to take the additional investment or not as it will not change the RI of his center Accept the additional investment as it will increase the RI of his center We do not have enough information to know whether the additional investment will increase or decrease the RI of the center