Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For its three investment centers, Bonita Company accumulates the following data: I II III Sales $2,100,000 $4,008,000 $3,911,000 Controllable margin 1,470,000 2,004,000 3,519,900 Average operating
For its three investment centers, Bonita Company accumulates the following data:
I | II | III | ||||
Sales | $2,100,000 | $4,008,000 | $3,911,000 | |||
Controllable margin | 1,470,000 | 2,004,000 | 3,519,900 | |||
Average operating assets | 5,021,000 | 7,914,000 | 12,150,000 |
The centers expect the following changes in the next year: (I) increase sales 12%; (II) decrease costs $448,000; (III) decrease average operating assets $542,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started