Wormwood Enterprises evaluates the performance of its two division managers using an ROI formula. The company target return is 17%. For the coming year, divisional estimates of relevant measures are: Calvin Sales Expenses Divisional Assets Hobbes Total $12,000,000 $48,000,000 $60,000,000 10,800,000 42,000,000 52,800,000 10,000,000 30,000,000 40,000,000 The managers of both operating divisions have the autonomy to make decisions regarding new investments. The manager of the Calvin division is contemplating an investment in an additional asset that would generate an ROI of 14%, and the manager of the Hobbes division is considering an investment in an additional asset that would generate an ROI of 18%. 1. Compute the ROI for each division disregarding the proposed new investments. 2. Based on your answer in part (1), which of the managers is likely to actually invest in the additional assets under consideration? 3. Are the outcomes of the investment decisions in part (2) likely to be consistent with overall corporate goals? 4. If the company evaluated the division managers' performance using a residual income measure with a target return of 17%, would the outcomes of the investment decisions be different from those described in part (2)?