Faced with headquartess desire to add a new product ine, Stefan Geeniec, manager of Bilt Pioducts Eist Ovkion, felt that he had io see the numbers befors he made a move. His divsion's ROl has ked the company for three years, and he doevit want any letdown. Alit Prodocts is a decentralleed wholesaler with four autonomous a visions. The divisions are evaluated on the basis of ROR, wath year end bonuses given to divisional managers who have the highest frot. Operating results for the comparys East Oivision for last year are given bolow: Fast Division to add would reire an investment of $5.850,000. The cost and revenue characteristics of the new product line per yea would be as follows Required: 1. Compute the East Division's ROi for fast year also compute the ROl as a would oppear if the hew product the weic added. (Do not round intermediate colculations. Round your final answer to the nesest whole number.) 1. Compute the East Division's ROI for tast year, hiso compute the ROl as a would appeat if the new product line were added, (Do not. round intermediate calculations, Round your finel answer to the nearest whole number.) 2. If you were in Grenier's position, would you accept or reject the new product line? Accept Reject 3. Why do you suppose headquarters is anxious for the Cast Division to add the new product line? Adding the new line would increase the compainys overall ROA Adding the new lloe would decreose the companys cverall ROI. 4. Suppose that the company's minimum required rate of iefuen on operating astets is inakid that performance k evaluated using residual income. a. Compute East Division's residual income for last yeaki abo compute the tesidial income as it would appeac if the new product line were added, 4. Suppose that the company's minimum required rate of return on operating assets is 11% and that performance is evaluated using residual income. a. Compute East Division's residual income for last year; also compute the residual income as at would appear if the new product line were added. b. Under these circumstances, If you were in Grenier's position, woild you accept or reject the new product line? Accept Relect