only need Required 1-3 and 6A-6C

Book "I know headquarters wants us to add that new product line sald Dell Havasi, manager of Billings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on investment (RO) has led the company for three years, and I don't want any letdown. Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest Rok. Operating results for the company's Office Products Division for this year are given below. Sales $ 22,400,000 Variable expenses 14.096,600 Contribution margin Fixed expenses 6,130.000 Net operating income 52,215,400 Divisional average operating at The company had an overall return on investment (ROI) of 18.00% this year (considering all divisions). Next year the Office Products Division has an opportunity to add a new product line that would require an additional investment that would increase average operating assets by $2,430,600. The cost and revenue characteristics of the new product line per year would be Print 8,345,400 rences $4,480,000 Salon Variable pene Pixed expense $ 9,705,000 551 of sales $ 2,591, 710 Recured nces Required: 1. Compute the Office Products Division's Rol 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 4. If you were in Dell Havasi's position, would you accept or reject the new product line? 5. Why do you suppose headquarters is anxious for the Office Products Division to add the new product line? 6. Suppose that the company's minimum required rate of return on operating assets in 15% 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 d. Using the residual income approach, if you were in Dell Havasis position, would you accept or reject the new product line? DY ntering Req 1 to 3 Req 4 Reg 5 Req 6A to 6C Req 60 bok Int 1. Compute the Office Products Division'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 sate as this y product line. inces (Do not round Intermediate calculations. Round your answers to 2 decimal places.) 1. ROI for this year 2. ROI for the new product line by itself 3. ROI for next year % % % Complete this question by entering your answers in the tabs below. Req 1 to 3 Req4 Reqs Req6A to 6C Reg 6D bok int 6. Suppose that the company's minimum required rate of return on operating assets is 15% and that performance 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 residua income for next year assuming that it performs the same as this adds the new product line. fences 1. Residual income for this year 2. Residual income for the new product line by itself 3. Residual income for next year ( Reqs Req 6D