The Plastics Division of Minock Manufacturing currently earns $$2\mathrm{.}87$ million and has divisional assets of $$35\mathrm{.}0$ million. The division manager is considering the acquisition of a new asset that will add to profit. The investment has a cost of $$5,400,000$ and will have a yearly cash flow of $$1,442,000.$ The asset will be depreciated using the straight$-$line method over a five$-$year life and is expected to have no salvage value. Divisional performance is measured using ROI with beginning$-$of$-$year net book values in the denominator. The company$$s cost of capital is $7$ percent. Ignore taxes. The division manager learns that there is an option to lease the asset on a year$-$to$-$year lease for $$1,162,000$ per year. All depreciation and other tax benefits would accrue to the lessor.

Required:

What is the divisional ROI if the asset is leased?