"I know headquarters wants us to add on that new product line," said Dell Havasi, manager of Billings Company's office products division. "But I want to see the numbers before I make any move. Our division has led the company for three years, and I don't want any letdown." Billings Company is a decentralized organization with five autonomous divisions. The divisions are evaluated on the basis of the return that they are able to generate on invested assets, with year-end bonuses given to the divisional managers who have the highest ROl figures. Operating results for the company's office products division for the most recent year are as follows Sales $504,000 ,000 Less: Variable expenses 327 ,600,000 Contribution margin 176,400,000 Less: Fixed expenses Net operating income Divisional operating assets 141,120,000 35,280000 84,000,000 The company had an overall ROI of 13.5% last year (considering all divisions). The office products division has an opportunity to add a new product line that would require an additional investment in operating assets of $50,400,000. The cost and revenue characteristics of the new product line per year would be as follows $100,800,000 ales Variable expenses Fixed expenses 65% of sales 28,224,000