Question
For its three investment centers, Sheridan Company accumulates the following data: I II III Sales $2,050,000 $4,076,000 $4,041,000 Controllable margin $1,435,000 $2,038,000 $3,636,900 Average operating
For its three investment centers, Sheridan Company accumulates the following data:
I II III
Sales $2,050,000 $4,076,000 $4,041,000
Controllable margin $1,435,000 $2,038,000 $3,636,900
Average operating assets $4,997,000 $7,999,000 $12,076,000
The centers expect the following changes in the next year: (I) increase sales20%; (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 of70%.(Round ROI to 1 decimal place, e.g. 1.5%.)
The expected return on investment
I ____%
II 30.6%
III _____%
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