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"Iknow headquarters wants us to add that new product line," said Dell Havasl, manager of Billings Company's Office Products Division. "But I want to see the numbers before I moke any move. Our division's return on investment (ROo) has led the company for three years. and I don't want any letdown," Bllings Company is a decentrallzed wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses glven to the divislonal managers who have the highest ROls. Operating results for the company's Office Products Divislon for this year are glven below: The company had an overall retum on investment (ROD) of 17.00% this year (considering al divisions). Next year the Office Products Division has an opportunity to add a new product line that would require an adcitional investment that would increase average operating assets by $2,326,200. The cost and revenue characteristics of the new product fine per year would be: Required: 1. Compute the Office Products Division's ROI for this year. 2. Compute the Office Products Dision's ROI for the new product line by itself. 3. Compute the Office Products Division's ROI for next year assuming that it performs the same as this year and adds the new product. line: 4. If you were in Dell Havasi's position, would you accept or reject the new product ilne? 5. Why do you suppose headquarters is anxious for the Orfice Products Division to add the new product line? 6. Suppose that the company's minimum required rate of return on operating assets is 14% and that performance is evaluated using tosidual income. a. Compute the Orice Products Division's tesidual income for this year: b. Compute the Office Products Dlvision's residual income for the new product ine by itself. c. Compute the Orfice Prodjects Division's residual income for next yeor assuming that it performs the same as this year and acids the now product line. d. Using the residual income approach, if you were in Dell Hevash pos tion, would you accept or teject the new product ine? Complete this question by entering your answers in the tabs below. 1. Compute the Office Products Dlvision's ROI for this year. 2. Compute the Office Products Division's ROI for the new product line by itself. 3. Compute the Office Products Division's ROI for next year assuming that it performs the same as this year and adds the new product line. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Complete this question by entering your answers in the tabs below. 6. Suppose that the company's minimum required rate of return on operating assets is 14% and that 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 line by itself. c. Compute the Office Products Division's residual income for next year assuming that it performs the same as this year and adds the new product line