Brief Exercise 10-10

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

		I		II		III
Sales		$2,000,000		$4,000,000		$4,000,000
Controllable margin		1,400,000		2,000,000		3,600,000
Average operating assets		5,000,000		8,000,000		10,000,000

The centers expect the following changes in the next year: (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 of 70%. (Round ROI to 1 decimal place, e.g. 1.5.)

		I		II		III
The expected return on investment		%		%		%

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