Hoffman Ceramics, a division of Kerwin Corporation, has an operating income of $82,000 and total assets of $410,000. The required rate of return for the company is 12%. The company is evaluating whether it should use return on investment (ROI) or residual income (RI) as a measurement of performance for its division managers. The manager of Hoffman Ceramics has the opportunity to undertake a new project that will require an investment of $164,000. This investment would earn $21,320 for the company Read the requirements. - X Requirements nit)? Red Firs 1. What is the original return on investment (ROI) for Hoffman Ceramics (before making any additional investment)? (En The Red of th per If th 2. What would the ROI be for Hoffman Ceramics if this investment opportunity were undertaken? Would the manager of the Hoffman Ceramics division want to make this investment if she were evaluated 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 Kerwin Corporation? Why or why not? 4. What would the residual income (RI) be for Hoffman Ceramics if this investment opportunity were to be undertaken? Would the manager of the Hoffman Ceramics division want to make this investment if she were evaluated 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 Kerwin Corporation? Why or why not? 6. Which performance measurement method, ROI or RI, promotes goal congruence? Why? ager he Requirement 1. What is the original return on investment (ROI) for Cleary Ceramics (before making any additional vestment)? First determine the formula to calculate the ROI Operating income Total assets the percentage to two decimal places) ginal return on investment (ROI) for Cleary Ceramics is ROI 20% Requirement 2. What would the ROI be for Cleary Ceramics if this investment opportunity were undertaken? Would the manager of the Cleary Ceramics division want to make this investment if she were evaluated based on ROI? Why or why not? (Enter the percentage to two decimal places) If this investment opportunity wore undertaken, the ROI would be Requirement 3. What is the ROI of the investment opportunity? Would the investment be desirable from the standpoint of Alderman Corporation? Why or why not? (Enter the percentage to two decimal places.) The ROI of the investment opportunity is Requirement 4. What would the residual income (RI) be for Cleary Ceramics if this investment opportunity were to be undertaken? Would the manager of the Cleary Ceramics division want to make this investment if she were evaluated based on RI? Why or why not? First determine the formula to calculate the RI. Operating income Total assets Target rate of return Let's begin by calculating the residual income (RI) for Cleary Ceramics if the investment is not made The residual income (RI) for Cleary Ceramics if the additional investment is not made is (Use parentheses or a minus sign for a negative RI) The residual income (RI) for Cleary Ceramics if this investment opportunity were to be undertaken is RI Requirement 5. What is the RI of the investment opportunity? Would the investment be desirable from the standpoint of Alderman Corporation? Why or why not? (Use parentheses or a minus sign for a negative RI.) The RI of the investment opportunity is