investment of $$104,000.$ This investment would earn $$15,600$ for the company.

Read the reguirements.

Requirement $1.$ What is the original return on investment $($ROI$)$ for McKnight Ceramics $($before making any additional investment$)?$

First determine the formula to calculate the ROI.

Operating income

Total assets

ROI

$($Enter the percentage to two decimal places.$)$

The original return on investment $($ROI$)$ for McKnight Ceramics is

$\%.$

Requirements

What is the original return on investment $($ROI$)$ for McKnight Ceramics $($before making any

additional investment$)?$

What would the ROI be for McKnight Ceramics if this investment opportunity were undertaken?

Would the manager of the Mcknight Ceramics division want to make this investment if she were

evaluated based on ROI? Why or why not?

What is the ROI of the investment opportunity? Would the investment be desirable from the

standpoint of Monette Corporation? Why or why not?

What would the residual income $(Rl$ be for McKnight Ceramics if this investment opportunity were

to be undertaken? Would the manager of the McKnight Ceramics division want to make this

investment if she were evaluated based on RI$?$ Why or why not?

What is the Rl of the investment opportunity? Would the investment be desirable from the

standpoint of Monette Corporation? Why or why not?

Which performance measurement method, ROI or RI$,$ promotes goal congruence? Why?