I know headquarters wants us to add that new product line, said Dell Havasi, manager of Billings Companys Office Products Division. But I want to see the numbers before I make any move. Our divisions return on investment (ROI) has led the company for three years, and I dont want any letdown.

Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest ROIs. Operating results for the companys Office Products Division for the most recent year are given below:

Sales	$	21,200,000
Variable expenses		13,405,600
Contribution margin		7,794,400
Fixed expenses		5,950,000
Net operating income	$	1,844,400
Divisional operating assets	$	4,240,000

The company had an overall return on investment (ROI) of 19.00% 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 $2,600,000. The cost and revenue characteristics of the new product line per year would be:

Sales	$ 9,100,000
Variable expenses	65% of sales
Fixed expenses	$ 2,538,900

Required: 1. Compute the Office Products Division's ROl for the most recent year; also compute the ROI as it would appear if the new product line is added. (Round the "Margin", "Turnover" and "ROI" answers to 2 decimal places.) Total Present New Line Sales Net operating income Operating assets Margin ROI