Office Equipment, IncModern DivisionIncome Statement for Year ending December 31, 2019

Sales	2 500 000,00 USD
Less variable costs	1 250 000,00 USD
Contribution Marging	1 250 000,00 USD
Less fixed expenses	900 000,00 USD
Net operating income	350 000,00 USD

Required:

(a)Calculate ROI and residual income for the Modern Division. The company expect a return of 6 percent on its assets. Evaluate performance of the management of the Modern Division.

(b)Operating assets for Modern Division currently average 1800 000 USD. The Modern Division can add a new product line for an investment of 300000 USD. Relevant data for the new product line are as follows:

sales	800.000.00 USD
variable expenses	0.60 of sales
	30000
fixed expenses	000

Determine the effects on ROI of accepting the new product line. (Round calculations to three decimal places.If residual income is used to evaluate managers, would this encourage the division to accept the new product line? Explain and show computations.

(c) Financial measures are known for their short-termismand encouragement to mind profit center manager own business. What type of accounting or administrative tools a company may use in order to promote cooperation between divisions aiming at maximalization of companys value?Provide at least 4 different solutions and critically evaluate your proposals.