### Analysis of ROI for Gerrard Company's Investment Centers#### Current Data:For its three investment centers, Gerrard Company accumulates the following data:| | I | II | III ||---------|---------------|---------------|---------------|| **Sales** | $1,900,000 | $4,075,000 | $4,069,000 || **Controllable Margin** | $912,240 | $1,838,390 | $4,209,800 || **Average Operating Assets** | $5,068,000 | $7,993,000 | $12,028,000 |#### Expected Changes in the Next Year:- Center I expects Sales to increase by 14%.- Center II expects a decrease in controllable fixed costs of $376,000.- Center III expects a decrease in average operating assets of $491,000.#### Expected Return on Investment (ROI):Compute the expected Return on Investment (ROI) for each center. Assume center I has a contribution margin percentage of 70%. **Note:** Round ROI to one decimal place (e.g., 1.5).| | I | II | III ||--------|------|------|------|| The expected return on investment | _____% | _____% | _____% |To learn effective methods for calculating ROI and understanding the impacts of different financial changes, please [click here](#).

Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

For its three investment centers, Gerrard Company accumulates the following data: II III Sales $1,900,000 $4,075,000 $4,069,000 Controllable margin Average operating assets 912,240 1,838,390 4,209,800 5,068,000 7,993,000 12,028,000 The centers expect the following changes in the next year: (I) increase sales 14%; (II) decrease controllable fixed costs $376,000; (III) decrease average operating assets $491,000. Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5.) I II III The expected return on investment % %

For its three investment centers, Gerrard Company accumulates the following data: II III Sales $1,900,000 $4,075,000 $4,069,000 Controllable margin Average operating assets 912,240 1,838,390 4,209,800 5,068,000 7,993,000 12,028,000 The centers expect the following changes in the next year: (I) increase sales 14%; (II) decrease controllable fixed costs $376,000; (III) decrease average operating assets $491,000. Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5.) I II III The expected return on investment % %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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