Question 5 of 5 <The South Division of Martinez Company reported the following data for the current year.$3,000,0002,010,000605,0005,000,000SalesVariable costsControllable fixed costsAverage operating assetsTop management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division tosubmit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses ofaction.1.2.3.Increase sales by $300,000 with no change in the contribution margin percentage.Reduce variable costs by $155,000.Reduce average operating assets by 3.00%.(a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.)Return on Investment(b) Using the ROI equation, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%)Action 1Action 2Action 3Return on investment20

Lets understand the basics. Return on investment is a ratio which shows how much net operating…

Answered: The South Division of Martinez Company…

The South Division of Martinez Company reported the following data for the current year. $3,000,000 2,010,000 605,000 5,000,000 Sales Variable costs Controllable fixed costs Average operating assets

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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