Question
For its three investment centers, Blossom Company accumulates the following data: I II III Sales $1,990,000 $3,962,000 $3,915,000 Controllable margin 1,390,964 1,983,971 3,521,466 Average operating
For its three investment centers, Blossom Company accumulates the following data:
I | II | III | ||||
---|---|---|---|---|---|---|
Sales | $1,990,000 | $3,962,000 | $3,915,000 | |||
Controllable margin | 1,390,964 | 1,983,971 | 3,521,466 | |||
Average operating assets | 5,044,000 | 7,957,000 | 12,138,000 |
The company expects the following changes for investment centers I, II, and III in the next year: investment center I increase sales 20%, investment center II decrease controllable fixed costs $427,000, and investment center III decrease average operating assets $516,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.)
I | II | III | ||||
---|---|---|---|---|---|---|
The expected return on investment | enter a percentage of expected return on investment % | enter a percentage of expected return on investment % | enter a percentage of expected return on investment % |
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