see the numbers before he made a move. His divglon's ROl has led the company for thres years, snd he doesn't want sny letdown.

end bonuses glven to divialonsl mansgers who heve the highest ROl. Opersting results for the compsnys East Divialon for last year

are given below:

The compony had an oversll ROI of $16\%$ last year $($conaldering oll divgiona$).$ The new product line that hesdqusrters warts Grenier's

Esat Dlvialon to add would require an investment of $$4,900,000.$ The coat and revenue charscterstics of the new product line per year

would be sa folawe:

Sales

variable experisos

Fixiod expenses

$$14,729,860$

res of slos

$53,528,360$

Requlred:

Compute the Esst Divialon's ROl for last year, olso compute the ROl ss it would oppeer if the new product line were sdied. $($Do not

round Intermedlate calculstiona. Round your final answer to the nearest whole numbec$]$

Fyou were in Grenier's position, would you sccept or reject the new product line?

Accept

Reject

Why do you suppose hesdqusrters is anxious for the Esst Dlvision to sde the new product line?

Adding the new line would decresse the compony's oversll ROL.

Adding the new line would incresse the compony's oversll ROI.

Suppoce that the compsny's minlmum requlred rate of return on opereting sasets is $15\%$ snd that performance is evs usted using

realdual incame.

were sdded.

b$.$ Under these circumstances, fyou were in Grenler's poaltion, would you sccept or reject the new product line?

Accept

Reject