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For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,070,000 $4,032,000 $4,042,000 Controllable margin 1,318,200 2,082,600 3,781,070 Average operating
For its three investment centers, Gerrard Company accumulates the following data:
I | II | III | ||||
Sales | $2,070,000 | $4,032,000 | $4,042,000 | |||
Controllable margin | 1,318,200 | 2,082,600 | 3,781,070 | |||
Average operating assets | 5,070,000 | 8,010,000 | 12,197,000 |
The centers expect the following changes in the next year: (I) increase sales 16%; (II) decrease costs $441,000; (III) decrease average operating assets $492,000. 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.)
I | II | III | ||||
The expected return on investment |
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