Help "I know headquarters wants us to add that new product line," said Dell Havasi manager of Beings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on investment RO has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest Rois. Operating results for the company's Office Products Division for this year are given below Sales Variable expenses contribution margin Fixed expenses Net operating income Divisional average operating assets 5 22,000,000 33,500,000 3.500.000 5.000.000 3 2.500.000 $ 4.443.500 The company had an overall return on investment (ROI) of 16.00% 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 $2,289,300. The cost and revenue characteristics of the new product line per year would be Sales Variable expenses Tied expenses $9,155,000 658 of sales $2,543.950 Required: 1. Compute the Office Products Division's margin, turnover 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 Havasi's 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 13% and that performance is evaluated using recital income * so 999 FE 8 2 3 4 5 6 7 8 co 9 0 W E R 0 2 Required: 1. Compute the Office Products Division's margin, turnover, 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 Havasi's 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 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. d. Using the residual income approach. If you were in Dell Havas's position, would you accept or reject the new product line? OR Complete this question by entering your answers in the tabs below. mt Reg 1 to 3 Reg 4 Reg 5 Reg 6A to 60 Req 60 ces 1. Compute the Office Products Division's margin, turnover, 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. (Do not round intermediate calculations, Round your answers to 2 decimal places.) Show less 1. ROI for this year 2 ROI for the new product line by itself 3. Rol for next year % Reg1093 Reg 4 > OD DES 98 F3 F5 $ % & - 2 ) 0 3 4 5 6 7 8 9 hapter 11 and 12: Performance Measurements Saved 1. Compute the Office Products Division's margin, turnover, and ROI for this year. 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line by itse 3. Compute the Office Products Division's margin, turnover, and ROI for next year assuming that itp adds the new product line. 4. If you were in Dell Havasi's 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 pro 6. Suppose that the company's minimum required rate of return on operating assets is 13% and that 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 new product line. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept or reje Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Req 5 Reg 6A to 60 Req 6D If you were in Dell Havasi's position, would you accept or reject the new product line? Accept Reject .com/ext/map/index.html?_con=con&external_browser0&launchUrl=https%253A%252F%25 9. Chapter 11 and 12: Performance Measurements i Saved 2 1. Compute the Office Products Division's margin, turnover, and ROI for this year. 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line by 3. Compute the Office Products Division's margin, turnover, and ROI for next year assuming that adds the new product line. 4. If you were in Dell Havasi's 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 6. Suppose that the company's minimum required rate of return on operating assets is 13% and th 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 new product line. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept or ook int Complete this question by entering your answers in the tabs below. rint Reg 1 to 3 Reg 4 Reqs Reg 6A to 6C Req 6D rences Why do you suppose headquarters is anxious for the Office Products Division to add the new product lin Adding the new line would increase the company's overall ROI. Adding the new line would decrease the company's overall ROI. PSYOLDSM70202 9. Chapter 11 and 12: Performance Measurements Saved 2 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 perfc new product line. d. Using the residual income approach, if you were in Dell Havasi's position, would you accep Complete this question by entering your answers in the tabs below. ook Req 1 to 3 Reg 4 Reg 5 Req 6A to 6C Req 6D Hint 6. Suppose that the company's minimum required rate of return on operating assets is 13% and 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 adds the new product line. rences 1. Residual income for this year 2. Residual income for the new product line by itself 3. Residual income for next year Saved 1. Compute the Office Products Division's margin, turnover, and ROI for this year. 2. Compute the Office Products Division's margin, turnover, and ROI for the new product line E 3. Compute the Office Products Division's margin, turnover, and ROI for next year assuming tha adds the new product line. 4. If you were in Dell Havasi's 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 6. Suppose that the company's minimum required rate of return on operating assets is 13% and 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 perform new product line. d. Using the residual income approach, if you were in Dell Havasi's position, would you accept Complete this question by entering your answers in the tabs below. es Req 1 to 3 Reg 4 Reg 5 Reg 6A to 6C Req 6D Using the residual income approach, if you were in Dell Havasi's position, would you accept or reject Accept Reject