Preston Ceramics, a division of Piper Corporation, has an operating income of $63,000 and total assets of $420,000. The required rate of retum for the company is 11%. The company is evaluating whether it should use retum on investment (ROI) or residual incorre (RT) as a measurement of performance for its division manopers. The manoger of Preston Coramics has the opporturity to undectake a new project that will require an investreet of $140,000. This investment would eam $18,200 for the company. Read the reouirements Requirement 1. What is the original retum on investreet (ROO) for Preston Ceramics (belofe making any additional investment)? First determine the formula to calculate the ROI. Requirements 1. What is the original retum on investrent (ROI) for Preston Ceramics pelore making any addisonal innestmenti? 2. What would the ROI be for Preston Cecarics it pis investmemt opportunity weo undertaken? Would the manager of the Preston Ceeamics division want to make Bis investment it she were walualed based on Ron? Why or why not? 3. What a the ROI of the invesument opportunial Wouls the investment be desiratio from the standpoint of Piper Coeporation? Wiy or Wey not? 4. What would the residual income (RI) be for Preston Ceramica if this investment opportuncty were to be undertaken? Would the mandager of the Peetson Ceramics divaion want to make this mosiment if she were eviluated based on fil? Why or why not? standpoint of Piper Corperation? Why or why not? 6. Which peformance measurement method, ROI er Fi, promotes goal congnence? Why