ROI calculation

Good morning, could you please help with the following question.

Budgeted statement of Division B for the month of July is shown below:
Sales revenue 1,300,000
Less variable costs (700,000)
Contribution 600,000
Less fixed costs (289,000)
Net profit 311,000
Divisional net assets 23,200,000
Division B has now been offered an immediate opportunity to invest in a new machinery at a cost of 2,120,000. The machinery is expected to have a useful economic life of 4 years, after which it could be sold for 200,000. Division’s B policy is to depreciate all of its machinery on a straight- line basis over the life of an asset.The machinery would be expected to expand Division B’s production capacity , resulting in an 8,5% increase in contribution per month.
Question asks for calculation of annualised ROI if the investment is accepted. The answer is as follows:
Depreciation 2,120,000 – 200,000)/48months = 40,000 per month
Net profit for July 311,000+ 600,000×8,5% – 40,000 = 322,000
Annualised net profit 322,000×12 = 3,864,000
Opening net assets after investment 23,200,000 + 2,120,000 = 23,320,000

ROI: 3,864,000/23,320,000 x100% = 15,26%

My doubts:
1.Is it right to include in total net assets (in ROI calculation) a new asset at its cost without reducing it by residual value of 200,000?
2.Is it a rule that we reduce operating profit by depreciation when calculating ROI and RI?

Thank you!