I II III

Sales $2,000,000 1,300,000 5,000,000

Controllable margin $4,000,000 2,000,000 8,000,000

Average operating assets $ 4,000,000 3,600,000 12,000,000

Data for the investment centers for Kaspar Company are given above. The centers expect the following changes in the next year:

(I) increase sales 15%;

(II) decrease costs $400,000;

(III) decrease average operating assets $500,000.

Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 70%.