Question
For its three investment centers, Swifty Company accumulates the following data: I II III Sales $2,440,000 $4,880,000 $4,880,000 Controllable margin 1,647,000 2,342,400 4,233,600 Average operating
For its three investment centers, Swifty Company accumulates the following data:
I | II | III | ||||
---|---|---|---|---|---|---|
Sales | $2,440,000 | $4,880,000 | $4,880,000 | |||
Controllable margin | 1,647,000 | 2,342,400 | 4,233,600 | |||
Average operating assets | 6,100,000 | 8,770,000 | 12,200,000 |
The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center II to decrease controllable fixed costs $464,000, and investment center III to decrease average operating assets $440,000. 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 percentages % | enter percentages % | enter percentages % |
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