Please help me with the functions needed to populate the correct answers in the highlighted areas. Thank you! ### ROI Analysis and Investment Opportunity for Adams Corporation's Northern DivisionAdams Corporation evaluates divisional managers based on Return on Investment (ROI). Below are the operating results for the company's Northern Division for last year:- **Sales:** $27,000,000- **Variable Expenses:** $16,200,000- **Contribution Margin:** $10,800,000- **Fixed Expenses:** $8,805,000- **Net Operating Income:** $1,995,000- **Divisional Operating Assets:** $9,500,000#### New Product Line OpportunityThe Northern Division has the opportunity to add a new product line, with the following financial details:- **Required Investment:** $2,500,000- **Net Operating Income:** $400,000#### Additional Information- **Adams Corporation's Minimum Acceptable Rate of Return:** 15%#### Required:Compute the following using the information provided above (refer to cells A4 to B17 for calculations).---This data allows for analysis of both the current performance of the Northern Division and the evaluation of the potential new product line, ensuring alignment with corporate financial criteria. **Transcription of Spreadsheet Image:**---**Section: Northern Division Performance Analysis**1. **Northern Division ROI for Last Year** - *[Input Value Placeholder]*2. **Northern Division ROI if New Product Line is Added** - *[Input Value Placeholder]*3. **Decision Making Based on ROI** - Determine whether the Northern Division manager will **ACCEPT** or **REJECT** the new product line based on ROI.4. **Northern Division Residual Income for Last Year** - *[Input Value Placeholder]*5. **Northern Division Residual Income if the New Product Line is Added** - *[Input Value Placeholder]*6. **Decision Making Based on Residual Income** - Determine whether the Northern Division manager will **ACCEPT** or **REJECT** the new product line based on residual income.---**Note:** The text contains placeholders where specific data entries are expected. These are sections where the ROI (Return on Investment) and residual income values will be analyzed to aid managerial decision-making regarding the introduction of a new product line. The decisions are categorized by ROI and residual income assessments.

ROI is a more general measure of an investment's profitability, residual income offers a more nuanced view by taking the cost of capital into account and emphasizing value creation. For the purpose of making wise decisions regarding investments, the use of resources, and overall financial performance, managers, investors, and companies can all benefit from these metrics.The formula for solving in ExcelNorthern Division ROI for last year =B8/B10Northern Division ROI if new product line is added=(B8+B15)/(B10+B14)Northern Division Residual income for last year =(B8-B10)*15%Northern Division Residual Income if new product line is added=(B8+B15)-(B10+B14)*15%In numerical Format Northern Division ROI for last year $1,995,000 / $9,500,000Northern Division ROI if new product line is added($1,995,000+$400,000)/($9,500,000+$2,500,000)Accept or Reject the product lineREJECT as ROI is decreasing as a result of new product line.Northern Division Residual income for last year ($1,995,000 - $9,500,000)*15%Northern Division Residual Income if new product line is added($1,995,000+$400,000)/($9,500,000+$2,500,000)*15% Accept or Reject the product lineACCEPT as Residual Income is increasing as a result of new product line. Final Answer Northern Division ROI for last year 21%Northern Division ROI if new product line is added (2,395,000/12,000,000)19.96%Accept or Reject the product lineRejectNorthern Division Residual income for last year $570,000Northern Division Residual Income if new product line is added$595,000 Accept or Reject the product lineAccept

Answered: Sales Variable expenses Contribution…

Business

Accounting

Sales Variable expenses Contribution margin Fixed expenses Net operating income Divisional operating assets $27,000,000 16,200,000 10,800,000 8,805,000 $1,995,000 $9,500,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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