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 AA BB 8 cc $170,000 150,000 230,000 Controllable Margin $42,820 27,160 77,320 The investment center is currently generating an ROI of 23% based on $1,210,000 in operating assets and a controllable margin of $287,000. 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, e.g. 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 AA BB 8 cc $170,000 150,000 230,000 Controllable Margin $42,820 27,160 77,320 The investment center is currently generating an ROI of 23% based on $1,210,000 in operating assets and a controllable margin of $287,000. 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, e.g. 52.5.) is the best choice and ROI will be %.
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 16P
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![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
AA
BB
cc
$170,000
150,000
230,000
Controllable Margin
$42,820
27,160
77,320
The investment center is currently generating an ROI of 23% based on $1,210,000 in operating assets and a controllable margin of
$287,000.
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, e.g. 52.5.)
is the best choice and ROI will be
%.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a063afd-1328-45c9-8108-d6b0d29797d8%2Ffe08a1ec-a8e1-444b-a0a8-f6cde15e3391%2F3wutg_processed.png&w=3840&q=75)
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
AA
BB
cc
$170,000
150,000
230,000
Controllable Margin
$42,820
27,160
77,320
The investment center is currently generating an ROI of 23% based on $1,210,000 in operating assets and a controllable margin of
$287,000.
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, e.g. 52.5.)
is the best choice and ROI will be
%.
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