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Exericse 24-17 The South Division of Wig Company reported the following data for the current year Sales Variable costs Controlable fixed costs Average operating assets
Exericse 24-17 The South Division of Wig Company reported the following data for the current year Sales Variable costs Controlable fixed costs Average operating assets $3,072,000 2,052,096 605,200 4,974,700 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 ROt in the next year. The manager believes it is feasible to consider the following independent courses of action 1. Increase sales by $321,000 with no change in the contribution margin percentaoe 2. Reduce variable costs by $154,200 3, Reduce average operating assets by 5%. (a) Compute the return on investment (ROI) for the ourrent year (Round ROI to 1 decimal place, e.g. 1.s Return on Investment (b) using the ROt formudla, compute the ROI under eadh of the proposed courses of action. (Round ROI to 1 decimal place, e.g. 1.s.) Return on investment Ation 2 Action
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