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Billings Company is a decentralized wholesaler with five autonomous divisions.

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 Havasi's position, would you accept or reject the new product line? Complete this question by entering your answers in the tabs below Req 1 to3 Req 4 Req 5 Req 6A to 6C Req 6D 1. Compute the Office Products Division's ROI for this year 2. Compute the Office Products DIvlslon's ROI for the new product lIne by Itself 3. Compute the Office Products Division's 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 lessA 1. ROl for this year 2. ROI for the new product line by itself 3. ROl for next year 52.001% 33.72 % 52.081% Req 1 to 3 Req 4

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