Zachary Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division: Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense Operating income Nonoperating item Loss on sale of land. Net income BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 Assets Cash Total assets Accounts receivable Merchandise inventory. Equipment less accumulated depreciation Nonoperating assets Liabilities BOWMAN DIVISION Balance Sheet As of December 31, Year 2 Accounts payable. Notes payable Stockholders' equity Common stock Retained earnings Total liabilities and stockholders' equity $ 107,080 59,775 47,305 (2,670) (4,015) 40,620 (4,800) $ 35,820 $ 12,572 40,366 36,300 90,378 9,400 $ 189,016 $ 9,517 69,000 79,000 31,499 $ 189,016 Required a. Which should be used to determine the rate of return (ROI) for the Bowman investment center, operating income or net income? b. Which should be used to determine the ROI for the Bowman investment center, operating assets or total assets? c. Calculate the ROI for Bowman. d. Zachary has a desired ROI of 11 percent. Headquarters has $95,000 of funds to assign to its investment centers. The manager of the Bowman Division has an opportunity to invest the funds at an ROI of 13 percent. The other two divisions have investment opportunities that yield only 12 percent. Calculate the new ROI for Bowman division, if the investment opportunity is adopted by Bowman. e. Based on the original data, calculate the original residual income. Also, calculate the new residual income based on information provided in Requirement d.