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The Eastern division of Delgado, Inc. is an investment center. It has reported the following data for the first quarter. Sales $400,000 Variable expenses
The Eastern division of Delgado, Inc. is an investment center. It has reported the following data for the first quarter. Sales $400,000 Variable expenses $260.000 Contribution margin $140,000 Fixed expenses $40,000 Net operating income $100,000 Average operating assets $475,000 The division has a target rate of return of 18% and an effective tax rate of 24% How would ROI be impacted if average operating assets increased, but all else remained the same?
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