Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7 know he edquarters wants us to add that new product line. sald Dellizvast manager of Binngs Cortipany's Otice Products DNision But I want to

image text in transcribed
7 know he edquarters wants us to add that new product line." sald Dellizvast manager of Binngs Cortipany's Otice Products DNision "But I want to see the numbers before I make any move. Our divisoris seturn on imestment ROOD has led the company for three years, and I don? want any letdown? Balings Company is a decentralized wholesaler with five autonomous divions The divions are evaluated on the basis of ROr. with yearend bonutes given to the divisional managers who have the highest ROlk. Operating recuits for the company's Omice Products Division for this year are given below The company tad an overal retum on investment (POH) of 16.00% this year (considering all divians). Nexd yecar the Oflice Products Division has an opportunity to add a new product line that would requare an additional investment that would increase averoge operating assets by 53,938,000. The cost and revenue characteristics of the neve product line per year would be: Required: 1. Compute the Ofice Products Division's margin, tumover, and ROI for this year 2. Compute the Oitice Products Division's margin, fumovec, and ROl for the new product line by treif. 3. Compute the Othce Products DWision's margin, fumover, and Rol for next yeor assuming that it performo the same as this year and adds the new product line. 4. It you were in Dell Havesrs position, would you accept or reject the new prodact line? 5. Why do you suppose headquarters is anpous for the Otfice Products Divison so add the new product line? 6. Sugpose that the company/s minimum sequired rate of retum on operationg assets is i3s and that performance is evaliated usiap residual income. a. Compite the Office Products Divsion's residual income for tha year b. Compute the Oflice Products Division's residual income for the new product lne by iseit 6. Compure the Office Prodocts Diveion s residust income for neat year assuming that it peitorms the same as this year and adds the new procuct line. d. Uang the residuat income appronch, if you were in Des Hovasirs posion, wocid you accept or reject the new product ande? Complete this question by entering your answnrs in the tabs below. 1. Compute the office Prodacts Covision's margin, turnover, and rol for this yeag. 2. Compute the office Prodacts Oivilin's margin, tumover, and Rol for the new product line by ituel, 3. Compute the office Products Divilions margin, tumovec, and Rol for next vear atruming that is performs the same as this year and adss the new product lne. (Da pot round internediate calcutationt. Found your ananers to 2 decin al placen.) 7 know he edquarters wants us to add that new product line." sald Dellizvast manager of Binngs Cortipany's Otice Products DNision "But I want to see the numbers before I make any move. Our divisoris seturn on imestment ROOD has led the company for three years, and I don? want any letdown? Balings Company is a decentralized wholesaler with five autonomous divions The divions are evaluated on the basis of ROr. with yearend bonutes given to the divisional managers who have the highest ROlk. Operating recuits for the company's Omice Products Division for this year are given below The company tad an overal retum on investment (POH) of 16.00% this year (considering all divians). Nexd yecar the Oflice Products Division has an opportunity to add a new product line that would requare an additional investment that would increase averoge operating assets by 53,938,000. The cost and revenue characteristics of the neve product line per year would be: Required: 1. Compute the Ofice Products Division's margin, tumover, and ROI for this year 2. Compute the Oitice Products Division's margin, fumovec, and ROl for the new product line by treif. 3. Compute the Othce Products DWision's margin, fumover, and Rol for next yeor assuming that it performo the same as this year and adds the new product line. 4. It you were in Dell Havesrs position, would you accept or reject the new prodact line? 5. Why do you suppose headquarters is anpous for the Otfice Products Divison so add the new product line? 6. Sugpose that the company/s minimum sequired rate of retum on operationg assets is i3s and that performance is evaliated usiap residual income. a. Compite the Office Products Divsion's residual income for tha year b. Compute the Oflice Products Division's residual income for the new product lne by iseit 6. Compure the Office Prodocts Diveion s residust income for neat year assuming that it peitorms the same as this year and adds the new procuct line. d. Uang the residuat income appronch, if you were in Des Hovasirs posion, wocid you accept or reject the new product ande? Complete this question by entering your answnrs in the tabs below. 1. Compute the office Prodacts Covision's margin, turnover, and rol for this yeag. 2. Compute the office Prodacts Oivilin's margin, tumover, and Rol for the new product line by ituel, 3. Compute the office Products Divilions margin, tumovec, and Rol for next vear atruming that is performs the same as this year and adss the new product lne. (Da pot round internediate calcutationt. Found your ananers to 2 decin al placen.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Risk Based Approach to Conducting a Quality Audit

Authors: Karla Johnstone, Audrey Gramling, Larry E. Rittenberg

10th edition

1305080572, 978-1305465664, 1305465660, 978-1305080577

More Books

Students also viewed these Accounting questions

Question

Describe a department managers role in the union organizing process

Answered: 1 week ago