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Exercise 14-17 The South Division of Martinez Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets
Exercise 14-17 The South Division of Martinez Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets $2,930,000 1,904,500 545,500 5,000,000 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $310,000 with no change in the contribution margin percentage. 2. Reduce variable costs by $170,000 3, Reduce average operating assets by 4%. Compute the return on investment (ROI) for the current yeaRound ROI to 2 decimal place, e.g. 1.56. Return on Investment Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal place, e.g. 1.56.) Return on investment Action 1 Action 2 Action 3 Click if you would like to Show Work for this question: Open Show Work
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