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Req 1 to 3 Req 4 Req 5 Req 6A to 6C Req 6D Why do you suppose headquarters is anxious for the Office Products
Req 1 to 3 Req 4 Req 5 Req 6A to 6C Req 6D Why do you suppose headquarters is anxious for the Office Products Division to add the new product line? Adding the new line would increase the company's overall ROI. Adding the new line would decrease the company's overall ROI. 6. Suppose that the company's minimum required rate of return on operating assets is 13% 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. Show less 1. Residual income for this year 2. Residual income for the new product line by itself 3. Residual income for next year Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject the new product line? Accept Reject
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