For its three investment centers, Flint-Company accumulates the following data: Sales Controllable margin Average operating assets 11 $2,360,000 $4,720,000 1,770,000 5,900,000 The expected return on investment 111 $4,720,000 2,548,800 4,455,360 9,540,000 11,800,000 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 Il to decrease controllable fixed costs $504,000, and investment center III to decrease average operating assets $376,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 75%. (Round ROI to 1 decimal place, e.g. 1.5%) % 111 %
For its three investment centers, Flint-Company accumulates the following data: Sales Controllable margin Average operating assets 11 $2,360,000 $4,720,000 1,770,000 5,900,000 The expected return on investment 111 $4,720,000 2,548,800 4,455,360 9,540,000 11,800,000 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 Il to decrease controllable fixed costs $504,000, and investment center III to decrease average operating assets $376,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 75%. (Round ROI to 1 decimal place, e.g. 1.5%) % 111 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:For its three investment centers, Flint-Company accumulates the following data:
Sales
Controllable margin
Average operating assets
$2,360,000
1,770,000
5,900,000
11
The expected return on
investment.
111
$4,720,000 $4,720,000
2,548,800
4,455,360
9,540,000
11,800,000
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 Il to decrease controllable fixed costs $504,000, and investment center III to decrease average operating
assets $376,000.
Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage
of 75%. (Round ROI to 1 decimal place, e.g. 1.5%)
%
111
%
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