Problem3 When the Essex Company formed three divisions a year ago, the president told the division managers an annual bonus would be given to the most profitable division. The bonus would be based on either the return on investment or residual income of the division. Investment is to be measured using gross b following data are available ook value or net book value. The Division Book value Operating, Inc. S500,000 $480,000 300,000 S53,500 $52,000 $33,300 All the assets are long-lived assets that were purchased 15 years ago and have 15 years of useful life remaining. A zero terminal disposal price is predicted. Essex's minimum return on investment used for computing residual income is 10%. Required Which method for computing profitability would each manager choose? Show supporting calculations. Where applicable, assume straight line depreciation