Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Could i have some help with my accounting homework please? I know headquarters wants us to add that new product line, said Dell Havasi, manager

Could i have some help with my accounting homework please?
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
"I know headquarters wants us to add that new product line, said Dell Havasi, manager of Billings Compary's Office Products Division "But I want to see the numbers beforel make a decision. Our division's return on investment (RO) has led the company for three years, and I don't want any letdown" Bilings Company is a decentralized wholesaler with five autonomous divisions. The divisions ate evaluated using Rol with year-end bonuses given to the divisional managers who have the highest ROls Operating results for the compariy's Olfice Products. Division for this year are given below The company had an overall refurn on investment (ROI) of 16.00% this year (considering all divisions) Next year the Office Products Division has an opportunity to add a new product requiring $2,875,000 of additionat average operating assets. The annual cost and revenue estimates for the new product would be: Required: 1 Compute the Office Products Division's margin, turnover, and Rol for this year: 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 adds 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 Oftice Pioducts Division's residual income for this year. b Compute the Otfice Products Division's residual income for the new product by itselt c. Compute the Office Products Division's residual income for next year assuming it performs the same as this year and adds thet 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 onswers in the tabs below. Required: 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 itself 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. 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 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 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 Rol for this year. 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, tumover, 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. 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 itself. 3. Compute the Office Products Division's margin, tumover, and ROI for next year assuming it performs the 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 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 new product. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject Complete this question by entering your answers in the tabs below. If you were in Dell Havasi's position, would you accept or reject the new product? Required: 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 itself 3. Compute the Office Products Division's margin, turnover, and ROI for next year assuming it performs the same as this year an the new product. 4. If you were in Dell Havasis 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 resic 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 add: 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. Why do you suppose headquarters is anxious for the office Products Division to add 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 usin 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 an new product. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject the new produ Complete this question by entering your answers in the tabs below. 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. 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 res 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 add 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. Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject the new product

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 Cases An Interactive Learning Approach

Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt

4th Edition

0132423502, 978-0132423502

More Books

Students also viewed these Accounting questions