Problem 12-4 Comparing Performance Using ROI (LO2 CC4, 6) Guenther Corporation uses the return on investment (ROI) measure to evaluate its managers. A summary of the performance of two divisions is given below: Average operating assets Net income Division A Division B $120,000 $ 170,000 26,400 35,700 The minimum required return on operating assets for Guenther Corporation is 20%. Required: 1-a. Compute the return on investment of Division A and Division B. Division A Division B Return on investment 0 1-b.According to Guenther's senior management, which division is the better performer? Division A Division B 2-a. Compute the residual income of Division A and Division B. Division A Division B Residual income 2-b.According to Guenther's senior management, which division is the better performer? Division A Division B 3. Suppose the manager of Division A were offered a one-year project that would increase his average operating assets by $130,000 and increase profit by $26,390. a. Would the manager accept the project under the current method of performance evaluation? Accept Reject b. Using your alternative measure of performance evaluation (as in part 2 above), do you think the manager should accept the project? Accept Reject