Data for the investment centers for Gerrard Company are given in BE24-9. The centers expect the following

Question:

Data for the investment centers for Gerrard Company are given in BE24-9. The centers expect the following changes in the next year:
In Exercise

(I) Increase sales 15%,
(II) Decrease costs $400,000,
(III) Decrease average operating assets $500,000.
Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of70%.

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...