Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $1,960,000 $4,006,000 $4,083,000 Controllable margin 1,372,000 2,003,000 3,674,700 Average operating

For its three investment centers, Gerrard Company accumulates the following data:

I

II

III

Sales $1,960,000 $4,006,000 $4,083,000

Controllable margin 1,372,000 2,003,000 3,674,700

Average operating assets 5,051,000 8,034,000 12,064,000

The centers expect the following changes in the next year: (I) increase sales16%; (II) decrease costs $359,000; (III) decrease average operating assets $493,000.

Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of70%.(Round ROI to 1 decimal place, e.g. 1.5%.)

The expected return on investment%

I

II

III

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice

10th edition

324645570, 978-0324645576

Students also viewed these Accounting questions