Question$1 \mathrm{R} \times 8 \mathrm{C}$ Accessibility tab summary: Financial information Adam's corporation is presented in rows 2 to 17.
1 $\square$ A B c D E F
2 Adams Corporation evaluates divisional managers based on ROI. Operating results for the company's Northern Division for last year are given below: 3 \begin{tabular}{|l|r|} \hline Sales & \\ \hline Variable expenses & $\$ 27,000,000$ \\ \hline Contribution margin & $16,200,000$ \\ \hline Fixed expenses & $10,800,000$ \\ \hline Net operating income & $8,805,000$ \\ \hline & $\$ 1,995,000$ \\ \hline Divisional operating assets & \\ \hline \end{tabular}
10 Divisional operating assets 11 12 The Northern Division has an opportunity to add a new product line as follows: 13 \begin{tabular}{|lr|} \hline Required investment & $\$ 2,500,000$ \\ Net operating income & $\$ 400,000$ \\ \hline \end{tabular}
14 Required investment 15 16 \begin{tabular}{|c|c|c|c|c|} \hline \multirow[t]{2}{*}{Adams Corporation's minimum acceptable rate of return} & \multirow[t]{2}{*}{15\%} & & & \\ \hline & & & & \\ \hline Required: & & & & \\ \hline Compute the following: & & & & \\ \hline \end{tabular}
Compute the following: (Use cells $\mathbf{A 4}$ to $\mathbf{B 1 7}$ from the given information to complete this question.) ``` 23 24 1. Northern Division ROI for last year 25 26 2. Northern Division ROI if new product line is added 27 28 3. Determine whether the Northern Division manager will ACCEPT or REJECT the new product line based on ROI. 29 30 4. Northern Division residual income for last year 31 325.Northern Division residual income if the new product line is added 33 ```
34 6. Determine whether the Northern Division manager will ACCEPT or REJECT the new product line based on residual income.