Cinder Corporation operates in a decentralized environment with several operating divisions whose managers are evaluated on the basis of Return on Investment (ROI). The company requires a 10% rate of return. Operating data for the companys Waterhole division for the year is as follows: Sales $500,000 Average operating assets $400,000 Variable costs $280,000 Fixed costs $100,000 Interest and taxes $15,000 Residual income $80,000 Suppose the Waterhole division manager has an opportunity to add a product line that will generate $50,000 in operating income and will only require an additional investment of $200,000. Will the division likely add the new product line?

a. No. The divisions new ROI measure will be lower than it is now.

b. No. The divisions new ROI will be lower than the required ROI.

c. Yes. The divisions new ROI measure will still far exceed the 10% required ROI.

d. Yes. The new product will add $30,000 in residual income to the divisions existing residual income.