The manager of the snack division of Fairfax Industries is evaluated on her divisions return on investment and residual income. The company requires that all divisions generate a minimum return on invested assets of 8 percent. Consistent failure to achieve this minimum target is grounds for the dismissal of a division manager. The annual cash bonus paid to division managers is 1 percent of residual income in excess of $100,000. The snack divisions operating margin for the year was $9.964 million, during which time its average invested capital was $56.99 million.

a. Compute the Snack Division's return on investment and residual income.

b. Will the manager of the Snack Division receive a bonus for her performance? If so, how much will it be?