For its 3 investment centers, Kaspar Company accumulates the given data:
|
|
I
|
|
II
|
|
III
|
| Sales |
|
$1,912,000 |
|
$3,929,300 |
|
$3,966,000 |
| Controllable margin |
|
899,640 |
|
2,383,200 |
|
3,325,740 |
| Average operating assets |
|
4,998,000 |
|
7,944,000 |
|
10,078,000 |
Centers expect the given changes in next year: (a) increase sales 10%; (b) decrease costs $430,100; (c) decrease average operating assets $530,500.
Determine expected return on investment (ROI) for every center. Suppose center I has the contribution margin percentage of 79%.