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Cable Company's managers are considering alternative strategies to improve ROI from that originally budgeted for the coming year. Alternative 1 increases advertising expenditures to
Cable Company's managers are considering alternative strategies to improve ROI from that originally budgeted for the coming year. Alternative 1 increases advertising expenditures to increase sales while alternative 2 reduces several operating expenses. Adjustments to operating assets are anticipated in each of the two alternatives as well. Information from the original budget and the two alternatives are presented below: Original Budget Alternative 1 Alternative 2 Sales 200,000 220,000 200,000 Operating 150,000 175,000 145,000 expenses Average 180,000 185,000 185,000 operating assets What is the relative ranking based upon ROI of the above three choices (highest to lowest)? Original Budget, Alternative 2, Alternative 1
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