The data for an investment center is given below. 1/1/22 $ 300,000 3,000,000 Current assets Plant assets Idle plant assets Land held for future use The controllable margin is $780,000. 250,000 1,200,000 12/31/21 $ 500,000 4,000,000 330,000 1,200,000

The data for an investment center is given below. 1/1/22 $ 300,000 3,000,000 Current assets Plant assets Idle plant assets Land held for future use The controllable margin is $780,000. 250,000 1,200,000 12/31/21 $ 500,000 4,000,000 330,000 1,200,000

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Instructions
What is the return on investment for the center for 2022?

The data for an investment center is given below.
1/1/22
$ 300,000
3,000,000
Current assets
Plant assets
Idle plant assets
Land held for future use
The controllable margin is $780,000.
250,000
1,200,000
12/31/21
$ 500,000
4,000,000
330,000
1,200,000

Formula Formula ROI (%) = Net Income Principal Amount × 100

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