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Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated using ROI, with year-end bonuses given to the divisional managers who

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Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated using ROI, with year-end bonuses given to the divisional managers who have the highest ROls, Operating results for the company's Office Products Division for this year are given below: The company had an overall return on investment (RO) of 16.00% this year (considering all divisions). Next year the Office Products Division has an opportunity to add a new product requiring $2,501,000 of additional average operating assets. The annual cost and revenue estimates for the new product would be: Required: 1. Compute the Orfice Products Division's margin, turnover, and ROl for this year: 2. Compute the Office Products Division's margin, turnover, and ROl for the new product by itself. 3. Compute the Office Products Oivision's margin, turnover, and ROI for next year assuming it performs the same as this year and adds the new product. 4. If you were in Dell Hovasi's position, would you accept or reject the new product? 5. Why do you suppose headquarters is anxious for the Office Products Division to add the new product? 6. Suppose the company's minimum required rate of return on operating assets is 13% and performance is evaluated using residual income. a. Compute the Office Products Division's residual income for this year. b. Compute the Office Products Division's residual income for the new product by itself. c. Compute the Office Products Division's residual income for next year assuming it performs the same as this year and adds the new product. d. Using the residual income opproach, if you were in Dell Havasi's position, would you accept or reject the new product? 2. Compute the Office Products Division's margin, turnover, and ROI for the new product by itself. 3. Compute the Office Products Division's margin, turnover, and ROI for next year assuming it performs the same as this year and adc the new product. 4. If you were in Dell Havasi's position, would you accept or reject the new product? 5. Why do you suppose headquarters is anxious for the Office Products Division to add the new product? 6. Suppose the company's minimum required rate of return on operating assets is 13% and performance is evaluated using residual income. a. Compute the Office Products Oivision's residual income for this year. b. Compute the Office Products Division's residual income for the new product by itself. c. Compute the Office Products Division's residual income for next year assuming it performs the same as this year and adds the new product. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject the new product? Complete this question by entering your answers in the tabs below. 6. Suppose the company's minimum required rate of retum on operating assets is 13% and performance is evaluated using residual income. a. Compute the Office Products Division's residual income for this year. b. Compute the Office Products Division's residual income for the new product by itself. c. Compute the Orfice Products Division's residual income for next year assuming it performs the same as this year and adds income. a. Compute the Office Products Divislon's residual income for this year. b. Compute the Office Products Division's residual income for the new product by itself. c. Compute the Office Products Division's residual income for next year assuming it performs the same as this year and ac new product. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject the new product? Complete this question by entering your answers in the tabs below. 1. Compute the Office Products Division's margin, turnover, and ROI for this year. 2. Compute the Office Products Division's margin, turnover, and ROI for the new product by itseif. 3. Compute the Office Products Division's margin, turnover, and ROI for next year assuming it performs the same as this year and adds the new product. Note: Do not round intermediate calculations. Round your answers to 2 decimal places

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