Patel Corporation is a Canadian company that manufactures electric components and has a very successful Division located in Eastern Canada. This Division is considered to be an investment center for purposes of managerial evaluation Patel uses ROI as a performance measure in all its Divisions and management bonuses are based on ROI. All investments in operating assets are expected to earn a minimum return of 14%. Patel's historical ROI has averaged a company wide ROI of 16.5% The most recent income statement for the Eastern Canadian Division is given below. The division's Average Operating Assets employed were $18,000,000. Eastern Canadian Division Divisional Income Statement For the Year Ended May 31, 2021 $43,200,000 31.800.000 11,400,000 Sales Cost of goods sold Gross Margin Less operating expenses: Selling expenses Administrative expenses Net operating income $5,700,000 1.920,000 7.620.000 $ 3.780.000 The Eastern Canadian Division is currently considering an investment opportunity that proposes the following amounts. Sales $4,000,000 Operating Expenses $3,400,000 Investment Required $3,500,000 Required: Calculate the following performance measures as of May 31, 2021 for The Eastern Canadian Division (a) ROI. (b) Residual income 1 2. Calculate the ROI on the Investment opportunity a. Will the management of the Eastern Canadian Division accept the investment opportunity? b. If residual income were used as a performance measure instead of ROI would the Eastern Canadian Division accept? Explain