Gunny is a decentralized real estate investment company. It allows division Investment Center managers decision rights related to which projects to invest in and how much total capital to employ. These division managers are evaluated, and bonuses are based, on their division$$s ROI. Selected end of $2017$ financial information for Division $4$ of Gunny Co$.$ is provided below:

Sales $$5,000,000$

Expenses $($including interest$)$ $$2,800,000$

Interest Expense $$400,000$

Total Assets $$20,000,000$

Gunny$$s Minimum desired rate of return $5\%$

The manager of Division $4$ is considering an investment in a new project that may produce good returns for Division $4$ and for Gunny. Projected initial investment and annual financial data for the project are given below:

Sales $$400,000$

Expenses $$350,000$

Initial Investment $$700,000$

Required:

$1)$ What is Division $4$s current ROI?

$2)$ Is the manager of Division $4$ likely to invest in the new project? Why or why not?

$3)$ Would the owners of Gunny likely want Division $4$ to invest into the project? Why or why not?

$4)$ Is there another performance measure that Gunny might use to evaluate the manager of Division $4$ to better align the manager$$s incentives with those of the owner? What measure?