Roanoke Inc.s total assets amount to $70,000. $40,000 of Roanokes assets are used by the Metals division. The companys required rate of return is at 9%. Last year, the Metals division reported Sales Revenue of $30,000 and Operating Expenses of $25,000. The Metals division has an opportunity to invest in a new project that is estimated to have a return on investment of 10%. First, compute the Return on Investment (ROI) and Residual Income (RI) for the Metals division based on last years performance. Then, assume the manager of the Metals division is a 100% self-interested individual, and answer whether the manager would choose to invest in the new project if they are paid a bonus based solely on each performance measure.

ROI _________ ROI: Choose to invest in new project? Yes / No (circle one)

RI __________ RI: Choose to invest in new project? Yes / No (circle one)

Please explain answers