LaserLife Printer Company is a decentralized organization with several autonomous divisions. The division managers are evaluated, in part, on the basis of the change in their return on invested assets. Operating results for the Packer Division for 2019 are budgeted as follows:

Sales	$5,000,000
Less variable costs	2,500,000
Contribution margin	2,500,000
Less fixed expenses	1,800,000
Net operating income	$ 700,000

Invested capital for the division are currently $3,600,000. For 2019, the division can add a new product line for an investment of $600,000. The new product line will generate sales of $1,600,000 and will incur fixed expenses of $600,000 annually. Variable costs of the new product will average 60% of the selling price.  

Required: 

1. What is the ROI for the new product line? 

2. What is the company's total ROI before and after accepting the new product line? 

3. What is the residual income for the new product line? 

4. If the corporate tax rate is 25%, the weighted average cost of capital is 4.5%, and total current liabilities change from $850,000 to $900,000 after the additional investment, what is the economic value added for the new product line? 

5. Which performance measure should the company use in order to encourage the division to accept the new product line and does this performance measure meet the objective of maximizing overall firm value