Question
For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,100,000 $3,986,000 $3,918,000 Controllable margin 952,470 1,988,250 4,211,200 Average operating
For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,100,000 $3,986,000 $3,918,000 Controllable margin 952,470 1,988,250 4,211,200 Average operating assets 5,013,000 7,953,000 12,032,000 The centers expect the following changes in the next year: (I) increase sales 10%; (II) decrease costs $411,000; (III) decrease average operating assets $518,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 80%. (Round ROI to 1 decimal place, e.g. 1.5.)
I%
II %
III %
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