Question
For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,080,000 $4,050,000 $3,989,000 Controllable margin 1,255,250 1,823,900 4,090,880 Average operating
For its three investment centers, Gerrard Company accumulates the following data:
| I | II | III | ||||
| Sales | $2,080,000 | $4,050,000 | $3,989,000 | |||
| Controllable margin | 1,255,250 | 1,823,900 | 4,090,880 | |||
| Average operating assets | 5,021,000 | 7,930,000 | 12,032,000 |
The centers expect the following changes in the next year: (I) increase sales 20%; (II) decrease costs $426,000; (III) decrease average operating assets $508,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%
The expected return of investment: 1: 2: 3:
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
Integrated Auditing Of ERP Systems
Authors: Yusufali F. Musaji
1st Edition
0471235180, 978-0471235187
