"I know headquarters wants us to add that new product line," said Dell Havasi, manager...
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"I know headquarters wants us to add 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's return on investment ROI has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with yearend bonuses given to the divisional managers who have the highest ROIs. Operating results for the company's Office Products Division for this year are given below: Sales Variable expenses Contribution margin Fixed expenses Net operating income Divisional average operating assets The company had an overall return on investment ROI of this year considering all divisions Next year the Office Products Division has an opportunity to add a new product line that would require an additional investment that would increase average operating assets by $ The cost and revenue characteristics of the new product line per year would be: tableSales$ 
"I know headquarters wants us to add 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's return on investment ROI has led the company for three years, and I don't want any letdown."
Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with yearend bonuses given to the divisional managers who have the highest ROIs. Operating results for the company's Office Products Division for this year are given below:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Divisional average operating assets
The company had an overall return on investment ROI of this year considering all divisions Next year the Office Products Division has an opportunity to add a new product line that would require an additional investment that would increase average operating assets by $ The cost and revenue characteristics of the new product line per year would be:
tableSales$
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