For its three investment centers, Grouper Company accumulates the following data: Sales Controllable margin Average operating assets I $1,840,000 1,242,000 4,600,000 The expected return on investment 11 $3,680,000 1,766,400 7,408,000 III $3,680,000 27 3,229,360 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 $456,000, and investment center III to decrease average operating assets $472,000. 9,200,000 Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 68% (Round ROI to 1 decimal place, e.g. 1.5%) 24 5 111
For its three investment centers, Grouper Company accumulates the following data: Sales Controllable margin Average operating assets I $1,840,000 1,242,000 4,600,000 The expected return on investment 11 $3,680,000 1,766,400 7,408,000 III $3,680,000 27 3,229,360 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 $456,000, and investment center III to decrease average operating assets $472,000. 9,200,000 Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 68% (Round ROI to 1 decimal place, e.g. 1.5%) 24 5 111
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acc
Transcribed Image Text:For its three investment centers, Grouper Company accumulates the following data:
Sales
$1,840,000
Controllable margin.
1,242,000
Average operating assets 4,600,000
I
||
The expected return on
investment
$3,680,000
1,766,400
7,408,000
III
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 $456,000, and investment center III to decrease average operating
assets $472,000.
$3,680,000
3,229,360
9,200,000
Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage
of 68%. (Round ROI to 1 decimal place, e.g. 1.5%.)
27
24
%
111
35
%6
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