divisional performance

At the end of 20X1, an investment centre has net assets of $1m and annual operating profits of $190,000. However, the bookkeeper forgot to account for the following:
A machine with a net book value of $40,000 was sold at the start of the year for $50,000 and replaced with a machine costing $250,000. Both the purchase and sale are cash transactions. No depreciation is charged in the year of purchase or disposal. The investment centre calculates return on investment (ROI) based on closing net assets.
Assuming no other changes to profit or net assets, what is the return on investment (ROI) for the year?

1. The answer is 19.8%
2. The calculation of the revised net assets has been done as follows:
-$1000,000- 40,000 + 50,000 -250000+250000.

3. Please explain the logic of the calculation.

Thanks.