Question 6 A-C only please

s Problem 10-18 Return on Investment (ROI) and Residual Income (L010-1, LO10-2) I know headquarters wants us to add that new product line," said Dell But I want to see the numbers before I make any move. Our and I don't want any letdown. Havasi, manager of Billings Company's Office Products Division Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of year-end bonuses given to the divisional managers who have the highest ROls. Operating results for the company's Office Products ROI, with 21,500,000 13.565,000 ,935, 000 Varlable expenses Contribution margin rixed expenses Set operating inoone Divisional average operating assets 4 301,500 The company had an overall return on investment RO) of 1700% this year (considering all divisions). Next year the Ofice Products Division has an opportunity to add a new product line that would require an additional investment that would increase average operating assets by $2,313,700. The cost and revenue characteristics of the new product line per year would be: Variable expenses Fixed expenses Required 1 Compute the Office Products Division's ROI for this year 2. Compute the Office Products Division's ROI for the new product ine 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 4. If you were in Det Havesis 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 ine? 6. Suppose that the company's minimum required rate of return on opering assets is 14% and that Performance s evaluated using residual Income C PrevS of s Next Q search or enter website name 3 4 5 6 8