Question
For its three investment centers, Kaspar Company accumulates the following data: I II III Sales $2,000,000 $4,000,000 $4,000,000 Controllable margin 1,300,000 2,000,000 3,600,000 Average operating
For its three investment centers, Kaspar Company accumulates the following data: I II III Sales $2,000,000 $4,000,000 $4,000,000 Controllable margin 1,300,000 2,000,000 3,600,000 Average operating assets 5,000,000 8,000,000 12,000,000 The centers expect the following changes in the next year: (I) increase sales 15%; (II) decrease costs $400,000; (III) decrease average operating assets $500,000. Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5.) I II III The expected return on investment % % %
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