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For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,050,000 $4,076,000 $4,041,000 Controllable margin 1,199,280 2,639,670 3,743,560 Average operating
For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,050,000 $4,076,000 $4,041,000 Controllable margin 1,199,280 2,639,670 3,743,560 Average operating assets 4,997,000 7,999,000 12,076,000 The centers expect the following changes in the next year: (I) increase sales 20%; (II) decrease costs $409,000; (III) decrease average operating assets $492,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 74%.
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