Ac?A?I know headquarters wants us to add that new product line,Ac???

said Fred Halloway, manager of Kirsi ProductsAc??c East Division. Ac?A?But

I want to see the numbers before I make a move. Our divisionAc??cs

return on investment (ROI) has led the company for three years, and

I donAc??ct want any letdown.Ac???

     Kirsi Products is a decentralized

wholesaler with four autonomous divisions. The divisions are

evaluated on the basis of ROI, with year-end bonuses given to

divisional managers who have the highest ROI. Operating results for

the companyAc??cs East Division for last year are given below:

expenses

margin

income

assets

The company had an overall ROI of 18% last year (considering all

divisions). The companyAc??cs East Division has an opportunity to add a

new product line that would require an investment of $3,110,000.

The cost and revenue characteristics of the new product line per

year would be as follows:

9,330,000

expenses

sales

2,603,070

Required:

-Compute the East DivisionAc??cs ROI for last year; also compute the

ROI as it would appear if the company performed the same as last

year and added the new product line. (Do not round

intermediate percentage values. Round other intermediate

calculations and final answers to 2 decimal places.)

        ROI

alone

position, would you accept or reject the new product line?

is anxious for the East Division to add the new product line?

minimum required rate of return on operating assets is 15% and that

performance is evaluated using residual income.

residual income for last year; also compute the residual income as

it would appear if the company performed the same as last year and

added the new product line.

income

$         

alone

$         

$         

you were in Fred Halloway's position would you accept or reject the

new product line?