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Exercise 23-17 The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Cont

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Answer #1

a) Net operating income = 3050000-1982500-600000 = 467500

Return on investment = 467500/5000000 = 9.35%

b) Calculate ROI

Action 1 = (300000*35%+467500)/5000000 = 11.45%

Action 2 = (467500+160000)/5000000 = 12.55%

Action 3 = 467500/4850000 = 9.64%

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