Faced with headquarters' desire to add a new product line. Stefan Grenier, mansger of Bilti Froducts' Esat Division, felt that he had to see the numbers before he made a move. His division's Rol hos kd the company for three years, and he doesn't want any ktdown. Biti Products is a decentralized whoksaler with four autonomous divisions. The divisions are evalusted on the bsis of Rol, with year-end bonuses given to divisional managers who have the highest Rol. Opersting results for the company's Est Dision for krt year ane given bebw: The company had an overall ROl of 15% Grenier's Est Division to add would require an investment of $4,200,000. The cost and revenue characteristics of the new product line peryear would be sollows: Pequlred: 1. Compute the Est Division's ROl for kst yesr; ako compute the ROl s it would appear if the new product line were added. iDo not round Intermedlate calculations. Round your final answer to the nearest whole number.) 2 If you were in Grenier's position, would you sccept or reject the new product line? Accept Reject 3. Why do you suppose headquarters is anxious for the Est Division to add the new product line? Adding the new line would decrese the company's overall ROI. Adding the new line would increse the company's ove rall ROI. 4. Suppose that the company's minimum required rate of return on ope rating sasets is 12% and that performance is evalusted using residusl income. a Compute Est Division's residusl income for kst year; also compute the residusl income so it would appear if the new product line were added. b. Under these circumtitances, if you were in Grenier's position, would you accept or reject the new product line? accept Reject