Data for the investment centers for Kaspar Company are given in BE10-9. The centers expect the following
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Data for the investment centers for Kaspar Company are given in BE10-9. The centers expect the following changes in the next year:
(I) Increase sales 15%;
(II) Decrease costs $400,000;
(III) Decrease average operating assets $500,000.
Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 70%.
Data From BE10-9
For its three investment centers, Kaspar Company accumulates the following data:
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-1118096895
6th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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