A company reported the following financial numbers for one of its Divisions for the year ; average total assets of $ 4,100,000 and net operating income of $ 610,000. The company has a target return of 11% of average invested assets ..

1. Compute the Northwest division's current ROI.

2. The Division VP has an opportunity to invest in a project that would require an investment of $730,000 and will generate additional net operating income of $95,000. What is the ROI of the project ? B. If you are the Divisional VP of the Division would you accept the project if ou are evaluated based on ROI? Why or why not?

3. The Division VP has an opportunity to invest in a project that would require an investment of $730,000 and will generate additional net operating income of $95,000 . A. Compute residual income for the Southwest Division without the project . B. Compute residual income for the Southwest Division with the new project C. If you are the Divisional VP of the Division would you accept the project if you are evaluated based on Residual Income ? Why or why not ?

4. Would the company want the Divisional VP to accept the project ? (Indicate yes or no and also your reason for your answer )