Question
For its three investment centers, Sunland Company accumulates the following data: I II III Sales $1,950,000 $3,980,000 $3,925,000 Controllable margin 1,365,105 1,991,857 3,529,098 Average operating
For its three investment centers, Sunland Company accumulates the following data: I II III Sales $1,950,000 $3,980,000 $3,925,000 Controllable margin 1,365,105 1,991,857 3,529,098 Average operating assets 5,027,000 8,043,000 12,029,000 The company expects the following changes for investment centers I, II, and III in the next year: investment center I increase sales 16%, investment center II decrease controllable fixed costs $413,000, and investment center III decrease average operating assets $496,000. Compute the expected return on investment (ROI) for each center. Assume investment 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 enter a percentage of expected return on investment % enter a percentage of expected return on investment % enter a percentage of expected return on investment %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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