For its three investment centers, Concord Company accumulates the following data: Sales Controllable margin Average operating assets I $2,280,000 1,596,000 5,700,000 The expected return on investment || ||| The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center II to decrease controllable fixed costs $392,000, and investment center III to decrease average operating assets $520,000. % $4,560,000 $4,560,000 2,280,000 4,134,400 8,350,000 11,400,000 Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) %
For its three investment centers, Concord Company accumulates the following data: Sales Controllable margin Average operating assets I $2,280,000 1,596,000 5,700,000 The expected return on investment || ||| The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center II to decrease controllable fixed costs $392,000, and investment center III to decrease average operating assets $520,000. % $4,560,000 $4,560,000 2,280,000 4,134,400 8,350,000 11,400,000 Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:For its three investment centers, Concord Company accumulates the following data:
Sales
$2,280,000
Controllable margin
1,596,000
Average operating assets 5,700,000
The company expects the following changes for investment centers I, II, and III in the next year: investment
center I to increase sales 15%, investment center II to decrease controllable fixed costs $392,000, and
investment center III to decrease average operating assets $520,000.
The
expected
return on
investment
I
Compute the expected return on investment (ROI) for each center. Assume investment center I has a
contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.)
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$4,560,000 $4,560,000
2,280,000
4,134,400
8,350,000 11,400,000
%
11
%
|||
%
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