Question
For its three investment centers, Crane Company accumulates the following data: I II III Sales $2,070,000 $4,062,000 $4,044,000 Controllable margin 1,448,748 2,027,522 3,644,598 Average operating
For its three investment centers, Crane Company accumulates the following data:
I | II | III | ||||
---|---|---|---|---|---|---|
Sales | $2,070,000 | $4,062,000 | $4,044,000 | |||
Controllable margin | 1,448,748 | 2,027,522 | 3,644,598 | |||
Average operating assets | 5,088,000 | 7,902,000 | 12,057,000 |
The company expects the following changes for investment centers I, II, and III in the next year: investment center I increase sales 18%, investment center II decrease controllable fixed costs $430,000, and investment center III decrease average operating assets $450,000. 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 | % | % | % |
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