5. Selected data for two divisions of the Royal Company are given below: South North Division Division Net sales for year $4,000,000 $2,000,000 Average total assets for year $2,000,000 $2,000,000 Operating income before taxes for year $360,000 $420,000 Tax rate 20% 20% Average after-tax cost of capital 10% 12% Required: A] Compute the ROI for each division. Income is dened as operating income after taxes. B} Based on the ROI, which division manager should receive a bonus? Bonuses are awarded if ROI equals or exceeds 15 percent. C} Compute the residual income for each division. Invested capital is defined as total assets. O) Based on the residual income, which division manager should receive a bonus? Bonuses are awarded if residual income is greater than $100,000