Henderson Ceramics, a division of Preston Corporation, has an operating income of $69,000 and total assets of $415,000. The required rate of return for the company is 14%. The company is evaluating whether it should use ROI or RI as a measurement of performance for its division managers. The manager of Henderson Ceramics has the opportunity to undertake a new project that will require an investment of $94,000. This investment would earn $21,000 for Henderson Ceramics. Requirement 1. What is the original ROI for Henderson Ceramics (before making any additional investment)? First, select the labels to complete the formula for the return on investment, ROI. What is the original return on investment (ROI) for Henderson Ceramics? (Round your answer to two decimal places.) Henderson Ceramics's original ROI is Requirement 2. What would the ROI be for Henderson Ceramics if this investment opportunity were undertaken? Would the manager of the Henderson Ceramics division want to make this investment if she evaluated it based on ROI? Why or why not? First find the ROI for Henderson Ceramics if this investment opportunity were undertaken. (Round your answer to two decimal places.) If this investment opportunity were undertaken, the ROI would be %. Would the manager of the Henderson Ceramics division want to make this investment if she evaluated it based on ROI? Why or why not? The manager of this division make this investment because investing in the new project the division's ROI. Requirement 3. What is the ROI of the investment opportunity? Would the investment be desirable from the standpoint of Preston Corporation? Why or why not? First find the ROI of the investment opportunity. (Round your answer to two decimal places.) evaluating whether it should use ROI or RI as a measurement of performance for its division managers. Requirements Would the manager of the Henderson Ceramics division want to make this investment if she evaluated it based on ROI? Why or why not? The manager of this division make this investment because investing in the new project the division's ROI. Requirement 3. What is the ROI of the investment opportunity? Would the investment be desirable from the standpoint of Preston Corporation? Why or why not? First find the ROI of the investment opportunity. (Round your answer to two decimal places.) The ROI of the investment opportunity is ). Would the investment be desirable from the standpoint of Preston Corporation? Why or why not? From the standpoint of Preston Corporation, this investment desirable. The ROI of the investment opportunity Preston's required rate of return. investment if she evaluated it based on RI? Why or why not? Select the labels in the formula to calculate the residual income, RI. x Now find the RI for Henderson Ceramics, if this investment opportunity were to be undertaken. (Use parentheses or a minus sign for a negative RI.) The RI would be $ Henderson Ceramics, a division of Preston Corporation, has an operating income of $69,000 and total assets of $415,000. The required rate of return for the company is 14%. The company is evaluating whether it should use ROI or RI as a measurement of performance for its division managers. The manager of Henderson Ceramics has the opportunity to undertake a new project that will require an investment of $94,000. This investment would earn $21,000 for Henderson Ceramics. Requirements 1. What is the original ROI for Henderson Ceramics (before making any additional investment)? 2. What would the ROI be for Henderson Ceramics if this investment opportunity were undertaken? Would the manager of the Henderson Ceramics division want to make this investment if she evaluated it based on ROI? Why or why not? 3. What is the ROI of the investment opportunity? Would the investment be desirable from the standpoint of Preston Corporation? Why or why not? 4. What would the RI be for Henderson Ceramics if this investment opportunity were undertaken? Would the manager of the Henderson Ceramics division want to make this investment if she evaluated it based on RI? Why or why not? 5. What is the RI of the investment opportunity? Would the investment be desirable from the standpoint of Preston Corporation? Why or why not? 6. Which performance measurement method, ROI or RI, promotes goal congruence? Why? Henderson Ceramics division want to make this ion? Why or why not