*8P11.45A (LO 5) Haniwall Industries has manufactured prefabricated houses for over 20 years. Calculate ROI and residual income and discuss impact on manager performance. The houses are constructed in sections that are assembled on customers' lots. Haniwall expanded into the precut housing market when it acquired Miramichi 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. Haniwall designated the Miramichi division as an investment centre. Haniwall uses the return on investment as a performance measure and defines investment as the average operating assets. Management bonuses are based in part on the ROI. All investments are expected to earn a minimum rate of return of 17%. Miramichi's ROI has ranged from 21.9% to 23.3% after it was acquired. Miramichi had an investment opportunity in 2020 that had an estimated ROI of 19%. Miramichi's management decided against the investment because it believed the investment would decrease the division's overall ROI. Selected financial information for Miramichi is presented below. The division's average operating assets were $7.5 million for the year 2020. MIRAMICHI DIVISION Selected Financial Information Year Ended December 31, 2020 Sales $ 16,000,000 Contribution margin 5,600,000 Controllable margin 1,500,000 Instructions a. Calculate the following performance measures for 2020 for the Miramichi division: (1) return on investment, and (2) residual income. a. (2) $225,000 b. Would the management of the division have been more likely to accept the investment opportunity it had in 2020 if residual income had been used as a performance measure instead of the ROI? Explain your