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 division's ROI has led the company for three years, and he doesn't 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 company's East Division for last year are given below: Sales Variable expenses Fixed expenses Contribution margin Operating income Divisional operating assets $29,400,000 14,480,000 14,920,000 12,568,000 $ 2,352,000 $7,350,000 The company had an overall ROI of 15% last year (considering all divisions). The new product line that headquarters wants Grenler's East Division to add would require an Investment of $4,200.000. The cost and revenue characteristics of the new product line per year would be as follows: Sales 5 12,600,000 Variable expenses Fixed expenses 70% of sales $ 3,024,000