Question
For its three investment centers, Martinez Company accumulates the following data: I II III Sales $2,000,000 $3,750,000 $3,730,000 Controllable margin 1,400,000 1,708,250 3,208,810 Average operating
For its three investment centers, Martinez Company accumulates the following data:
| I | II | III | ||||
| Sales | $2,000,000 | $3,750,000 | $3,730,000 | |||
| Controllable margin | 1,400,000 | 1,708,250 | 3,208,810 | |||
| Average operating assets | 5,000,000 | 7,630,000 | 9,860,000 |
The centers expect the following changes in the next year: (I) increase sales 10%; (II) decrease costs $390,000; (III) decrease average operating assets $450,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Business Statistics Communicating With Numbers
Authors: Sanjiv Jaggia, Alison Kelly
2nd Edition
0078020557, 978-0078020551
