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The South Division of Coronado Company reported the tollowing data for the current year 3,050,00 Variable costs Controllable fixed costs Average operating assets 605,000 5,000,000
The South Division of Coronado Company reported the tollowing data for the current year 3,050,00 Variable costs Controllable fixed costs Average operating assets 605,000 5,000,000 Top management is unhappy with the investment center's return on investment (ROI) It asks the manager af the South Division to submit plans to improve ROl in the next year. The manager believes it is feasible to consider the following independent courses of 1. Increase sales by $300,000 with no change in the contribution margin percentage 2. Reduce vanable costs by $155,000 3. Reduce average operating assets by S%. 1.57%. planes, et, return on investment (ROI) for the current yeat. (Round ROI to 2 decimat (a) Compute the Retum on Investment (b) Using the ROI formula, compute the ROt under each of the proposed courses of action, (Round ROI to 2 decimal places, eg. 1.57%.) Return on investment Action 1 Action 2 Action 3 est/agtist.nii 8 : 1. Increase sales by $300,000 with no change in the contribution margin percentage. 2. Reduce variable costs by $155,000 3. Reduce average operating assets by 5%. (a) Compute the return ton investment (ROI) for the current year, (Round ROl to 2 de, mal pla es eo 1.57%) Return on Investment (b) Using the RO1 formula, compute the ROI under each of the proposed courses of action. (Round ROI to decimal places, e.g 1.57%.) urn on investment Action i Action 2 Action 3 By accessing this Question Assistanoe, you will learn while you eam points based on the Point Potential Policy set by your instructor sed SAVE FO LATER Question Attempts: O of 3 u Version 4.24.1 & Sons Inc. All Rights Reserved. A Division of 8 6 5
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