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Faced with headquarters desire to add a new product line, Stefan Grenier, manager of Bilti Products East Division, felt that he had to see the numbers before he made a move. His divisions ROI has led the company for three years, and he doesnt want any letdown.Bilti 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 companys East Division for last year are given below: Sales$$32,900,000$ Variable expenses $14,930,000$ Contribution margin $17,970,000$ Fixed expenses $15,009,000$ Operating income$$2,961,000$ Divisional operating assets$$8,225,000$ The company had an overall ROI of $18\%$ last year $($considering all divisions$).$ The new product line that headquarters wants Greniers East Division to add would require an investment of $$4,700,000.$ The cost and revenue characteristics of the new product line per year would be as follows: Sales$$14,100,000$ Variable expenses $65\%$ of salesFixed expenses$$3,948,000$ Required:$1.$ Compute the East Divisions ROI for last year; also compute the ROI as it would appear if the new product line were added. $($Do not round intermediate calculations. Round your final answer to the nearest whole number.$)2.$ If you were in Greniers position, would you accept or reject the new product line?multiple choice $1$AcceptReject $3.$ Why do you suppose headquarters is anxious for the East Division to add the new product line?multiple choice $2$Adding the new line would decrease the company's overall ROI.Adding the new line would increase the company's overall ROI. $4.$ Suppose that the companys minimum required rate of return on operating assets is $16\%$ and that performance is evaluated using residual income.a$.$ Compute East Divisions residual income for last year; also compute the residual income as it would appear if the new product line were added.b$.$ Under these circumstances, if you were in Greniers position, would you accept or reject the new product line?multiple choice $3$AcceptRejec

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