Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For its three investment centers, Gerrard Company accumulates the following data: II Sales $2.000.000 $4.000,000 $4,000,000 Controllable margin 1.400,000 2,000,000 3,600,000 Average operating assets
For its three investment centers, Gerrard Company accumulates the following data: II Sales $2.000.000 $4.000,000 $4,000,000 Controllable margin 1.400,000 2,000,000 3,600,000 Average operating assets 5,000,000 8,000,000 10,000,000 The company expects the following changes for investment centerst, I, and I in the next year: investment center I to increase sales 15%, Investment center Il to decrease controllable fixed costs $400,000, and investment center Il to decrease average operating assets $400,000. Compute the expected return on investment (ROI) for each center. Assume investment center has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, eg. 1.5%) %3D III The expected return on investment
Step by Step Solution
★★★★★
3.58 Rating (158 Votes )
There are 3 Steps involved in it
Step: 1
Answer Answer BE259 Calculation of Return on Investment Investment centre 114000005...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