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For its three investment centres, Stahl Company accumulates the following data: Centre I Centre II Centre III Sales $1,971,600 $4,003,000 $3,944,000 Controllable margin 788,640 2,346,970
For its three investment centres, Stahl Company accumulates the following data:
Centre I | Centre II | Centre III | ||||
Sales | $1,971,600 | $4,003,000 | $3,944,000 | |||
Controllable margin | 788,640 | 2,346,970 | 3,643,800 | |||
Average operating assets | 4,929,000 | 8,093,000 | 12,146,000 |
The centres expect the following changes in the next year: Centre I a 20% increase in sales; Centre II a $323,720 decrease in costs; and Centre III a $485,840 decrease in average operating assets. Calculate the expected return on investment for each centre. Assume Centre I has a contribution margin percentage of 80%. (Round ROI to 2 decimal places, e.g. 1.57%.)
Centre I | Centre II | Centre III | ||||
The expected return on investment | % | % | %
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