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For its three investment centers, Gerrard Company accumulates the following data: 1 II Sales Controllable margin Average operating assets $2,100,000 1,470,000 4,928,000 $3,983,000 1,991,500 8,080,000
For its three investment centers, Gerrard Company accumulates the following data: 1 II Sales Controllable margin Average operating assets $2,100,000 1,470,000 4,928,000 $3,983,000 1,991,500 8,080,000 $4,068,000 3,661,200 12,174,000 The centers expect the following changes in the next year: (1) increase sales 20%; (II) decrease costs $356,000; (III) decrease average operating assets $461,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) II III The expected return on investment % % 31.26 %
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