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Managers of Harstin Corporation are considering alternative strategies to improve ROI from that originally budgeted for the coming year. Alternative 1 increases advertising to increase
Managers of Harstin Corporation are considering alternative strategies to improve ROI from that originally budgeted for the coming year. Alternative 1 increases advertising to increase sales while alternative 2 reduces a number of operating expenses. Adjustments to operating assets are anticipated in each of the two alternatives as well. The numbers as in the original budget and in the two alternatives are set out below: Original Budget Alternative 1 Alternative 2 Sales $200,000 $220,000 $200,000 Operating expenses 150,000 175,000 145,000 Average operating 180,000 185,000 185,000 assets What is the relative ranking based upon ROI of the above three choices (highest to lowest)? Alternative 1, alternative 2, original budget. Original budget, alternative 1, alternative 2. Original budget, alternative 2, alternative 1. Alternative 2, original budget, alternative 1
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