Complete the following calculations for the three investment centers shown: Inve

Question

Complete the following calculations for the three investment centers shown: Investment Center 1: Operating income $3,000,000 Assets invested Performance indicator 25% Investment Center 2: $3,500,000 Desired ROI Assets invested 4,000,000 Performance indicator 20,000 Investment Center 3: After-tax operating income Cost of capital 38% Total assets $500,000 Current liabilities 150,000 Performance indicator 15,000 For each Investment Center, identify which performance indicator is used. The input in the box below will not be graded, but may be reviewed and considered by your instructor.

Explanation / Answer

Hi, Investment Center 1 = 3000000/.25 = 12000000 (Value of total assets) Investment Center 2 = 3500000/4000000 = 87.5% Investment Center 3 = 38% (500000 - 150000) = 133000 Thanks, Aman

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