Question
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
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