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 ROL. Operating results for the company's East Division for last year are given below: Sales Variable expenses Contribution margin. Fixed expenses Operating Income Divisional operating assets $27,300,000 14,210,000 13,090,000 10,906,000 $ 2,184,000 $ 9,100,000 4 The company had an overall ROI of 12% last year (considering all divisions). The new product line that headquarters wants Grenier's East Division to add would require an investment of $5,850,000. The cost and revenue characteristics of the new product line per year would be as follows. Sales $ 11,700,000