Question
An investment center manager for Timberwolves, Inc. is considering three possible investments. The required asset investment and controllable margins are as follows: Project Average Investment
An investment center manager for Timberwolves, Inc. is considering three possible investments. The required asset investment and controllable margins are as follows:
Project Average Investment Controllable Margin
AA $130,000 $23,000
BB 140,000 26,500
CC 210,000 41,500
The investment center is currently generating an ROI of 19.3% based on $1,450,000 in operating assets and a controllable margin of $280,000.
If the manager can select only one project, determine which investment project is the best choice to increase the investment centers ROI. Please show your work and explain the rationale for your choice.
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