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Please answer all parts, will thumbs up. 2 Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis Biaings
Please answer all parts, will thumbs up.
2 Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis Biaings of ROL with year-end benuses given to the divisional managers who have the highest ROls. Operating company's Office Products Division for this year are given below results for the Sales $21,902,000 13.788,600 8,113,400 Contribution margin Pixed expenses ebookNet operating incone Divisional average operating assets $ 4,562,500 Print The company had an overal return on investment (RO of 18.00% this year (considering all divisions. Next year the ReferenceOffice Products Division has an opportunity to add a new product ine that would require an addsional investment that would increase average operating assets by $2,250.500. The cost and revenue characteristics of the new product line per year would be: $9,450,000 65t of sales Pixed expenses $2,570,200 Variable expenses Required 1. Compute the Office Products Divisions ROl for this year 2. Compute the Office Products Division's ROl for the new product line by itself 3. Compute the new product line. 4. I the Office Products Division's ROI for next year assuming that it performs the same as this year and adds If you were in Deil Havasi's position, would you accept or reject the new product line? 5. Why do you suppose headquarters is anxious for the Ofice Products Division 6 Suppose that the to add the new product line? S company's minimum required rate of return on operating assets is 14% and that performance is a Compute b. Compute the Office Products Division's residual income c Compute the Office the Office Products Division's residual income for this year for the new product line by itset Products Division's residual income for next year assuming thet it performs the same as this year d using the resiualincoe spproac if you were in Dell Havasts position, would you accept or reject the new the residual income approach, if you were in Dell Havasi's position, would you accept or reject the new product line? Complete this question by entering your answers in the tabs below. Req 1 to Reg 4 Req 5 Reg GA to Req 60 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 same as this year and adds the new product line. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Show less A Rol for the new product ne by itsef for Step by Step Solution
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