Sales Variable expenses Contribution margin Fixed expenses Net operating income Divisional average operating assets $ 10,000,000 6.000.000 4,000,000 3,200,000 $ 800,000 $ 4,000,000 The company had an overall return on investment (ROI) of 15% 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 $1,000,000. The cost and revenue characteristics of the new product line per year would be Sales Variable expenses Fixed expenses $2,000,000 60% of sales $640,000 Required: 1. Compute the Office Products Division's margin, tumover, and ROI for this year. 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line by itself 3. Compute the Office Products Division's margin, turnover and 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 Havasis 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 is 12% 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 Havast's position, would you accept or reject the new product line? Complete this question by entering your answers in the tabs below. Reg 1 to 3 Reg 4 Reg 5 Req 6A to 6C Reg D 1. Compute the Office Products Division's margin, tumover, and ROI for this year, 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line by itself 3. Compute the Office Products Division's margin, tumover, and ROI for next year assuming that it performs the same as this Sales Variable expenses Contribution margin Fixed expenses Net operating income Divisional average operating assets $ 10,000,000 6.000.000 4,000,000 3,200,000 $ 800,000 $ 4,000,000 The company had an overall return on investment (ROI) of 15% 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 $1,000,000. The cost and revenue characteristics of the new product line per year would be Sales Variable expenses Fixed expenses $2,000,000 60% of sales $640,000 Required: 1. Compute the Office Products Division's margin, tumover, and ROI for this year. 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line by itself 3. Compute the Office Products Division's margin, turnover and 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 Havasis 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 is 12% 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 Havast's position, would you accept or reject the new product line? Complete this question by entering your answers in the tabs below. Reg 1 to 3 Reg 4 Reg 5 Req 6A to 6C Reg D 1. Compute the Office Products Division's margin, tumover, and ROI for this year, 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line by itself 3. Compute the Office Products Division's margin, tumover, and ROI for next year assuming that it performs the same as this