An investment center manager is considering three possible investments. The company's required return is 10%. The required asset investment, controllable margins, and the ROIs of each investment are as follows: Project Average Investment Controllable Margin AA $160,000 $33,440 BB 140,000 18,140 CC 220,000 68,480 The investment center is currently generating an ROI of 23% based on $1,200,000 in operating assets and a controllable margin of $278,000. If the manager can select only one project, determine which is the best choice to increase the investment center's ROI by computing the investment center's ROI for each of the investment alternatives. (Round answer to 1 decimal place, eg. 52.5.) is the best choice and ROI will be %
An investment center manager is considering three possible investments. The company's required return is 10%. The required asset investment, controllable margins, and the ROIs of each investment are as follows: Project Average Investment Controllable Margin AA $160,000 $33,440 BB 140,000 18,140 CC 220,000 68,480 The investment center is currently generating an ROI of 23% based on $1,200,000 in operating assets and a controllable margin of $278,000. If the manager can select only one project, determine which is the best choice to increase the investment center's ROI by computing the investment center's ROI for each of the investment alternatives. (Round answer to 1 decimal place, eg. 52.5.) is the best choice and ROI will be %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:An investment center manager is considering three possible investments. The company's required return is 10%. The required asset
investment, controllable margins, and the ROIs of each investment are as follows:
Project
Average Investment
Controllable Margin
AA
$160,000
$33,440
BB
140,000
18,140
CC
220,000
68,480
The investment center is currently generating an ROI of 23% based on $1,200,000 in operating assets and a controllable margin of
$278,000.
If the manager can select only one project, determine which is the best choice to increase the investment center's ROI by computing
the investment center's ROI for each of the investment alternatives. (Round answer to 1 decimal place, eg. 52.5.)
is the best choice and ROI will be
%
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