compute Roi

compute residual income

Adams Corporation evaluates divisional managers based on ROI. Operating results for the company's Northern Division for last year are given below: 12 The Northem Division has an opportunity to add a new product line at the beginning of the year as follows: The Northern Division has an opportunity to add a new product line at the beginning of the year as follows: \begin{tabular}{|llr|} \hline Average required investment & $ & 2,500,000 \\ Net operating income & $ & 400,000 \end{tabular} Adams Corporation's minimum acceptable rate of return 15% Compute the following: Northern Division ROI for last year Northern Division ROI if new product line is added Write an IF statement to determine whether the Northern Division manager will ACCEPT or REJECT the new product line based on ROI. Northern Division residual income for last year Northern Division residual income if the new product line is added Write an IF statement to determine whether the Northern Division manager will ACCEPT or REJECT the new product line based on residual income