2 Adams Corporation evaluates divisional managers based on ROI. Operating results for the company's Northern Division for last year are given below: 3 4 Sales $27,000,000 5 Variable expenses 16,200,000 6 Contribution margin 10,800,000 7 Fixed expenses 8,805,000 8 Net operating income $1,995,000 9 10 Divisional operating assets $9,500,000 11 12 The Northern Division has an opportunity to add a new product line as follows: 13 14 Required investment $2,500,000 15 Net operating income $400,000 16 17 Adams Corporation's minimum acceptable rate of return 15% 18 19 Required: 20 Compute the following: 21 22 (Use cells A4 to B17 from the given information to complete this question.) 23 24 Northern Division ROI for last year 25 26 Northern Division ROI if new product line is added 27 Determine whether the Northern Division manager will ACCEPT or 28 REJECT the new product line based on ROI. 21 22 (Use cells A4 to B17 from the given information to complete this question.) 23 . 24 Northern Division ROI for last year 25 26 Northern Division ROI if new product line is added 27 Determine whether the Northern Division manager will ACCEPT or 28 REJECT the new product line based on ROI. 29 30 Northern Division residual income for last year 31 32 Northern Division residual income if the new product line is added 33 Determine whether the Northern Division manager will ACCEPT or 34 REJECT the new product line based on residual income. 35