For its three investment centers, Gerrard Company accumulates the following data: Sales Controllable margin Average operating assets I $2,090,000 1,463,000 4,949,000 || $3,943,000 1,971,500 8,073,000 The expected return on investment ||| $4,079,000 3,671,100 12,147,000 The centers expect the following changes in the next year: (1) increase sales 10%; (II) decrease costs $384,000; (III) decrease average operating assets $545,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) % || % ||| %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Please do not give solution in image format thanku
For its three investment centers, Gerrard Company accumulates the following data:
Sales
Controllable margin
Average operating assets
I
||
$2,090,000 $3,943,000
1,463,000
1,971,500
4,949,000
8,073,000
|||
$4,079,000
3,671,100
12,147,000
The centers expect the following changes in the next year: (I) increase sales 10%; (II) decrease costs $384,000; (III) decrease average
operating assets $545,000.
The expected return on
investment
Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%.
(Round ROI to 1 decimal place, e.g. 1.5%.)
%
||
%
do
%
Transcribed Image Text:For its three investment centers, Gerrard Company accumulates the following data: Sales Controllable margin Average operating assets I || $2,090,000 $3,943,000 1,463,000 1,971,500 4,949,000 8,073,000 ||| $4,079,000 3,671,100 12,147,000 The centers expect the following changes in the next year: (I) increase sales 10%; (II) decrease costs $384,000; (III) decrease average operating assets $545,000. The expected return on investment Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) % || % do %
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education