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Brief Exercise 22-10

For its three investment centers, Gerrard Company accumulates the following data:

I

II

III

Sales $1,940,000 $3,938,000 $3,914,000

Controllable margin 941,640 2,466,670 4,022,370

Average operating assets 4,956,000 7,957,000 12,189,000

The centers expect the following changes in the next year: (I) increase sales 16%; (II) decrease controllable fixed costs $396,000; (III) decrease average operating assets $504,000.

Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 78%. (Round ROI to 1 decimal place, e.g. 1.5.)

I

II

III

The expected return on investment

%

%

%

Brief Exercise 22-10 For its three investment centers, Gerrard Company accumulates the following data: Sales Controlliable margin Average operating assets 4,956,000 7,957,000 2,189,000 $1,940,000 $3,938,000 $3,914,000 941,640 2,466,670 4,022,370 The centers expect the following changes in the next year: (1) increase sales 16%; (II) decrease controllable fixed costs $396,000; (III) decrease average operating assets $504,000. Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 78%. (Round R01 to 1 decimal place, e.g. 1.5.) The expected return on investment Click if you would like to Show Work for this questioni Open Show Work By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Question Attempts: O of S used SAVE FOR LATERSUBAIT

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