For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,090,000 $3,943,000 $4,079,000 Controllable margin 1,463,000 1,971,500 3,671,100 Average operating assets 4,949,000 8,073,000 12,147,000 The centers expect the following changes in the next year: (I) increase sales 10%; (II) decrease costs $384,000; (III) decrease average operating assets $545,000. 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%.)

3. saving two consumers, larry and jeff, have utility functions defined over the two periods of their lives: middle age (period zero) and retirement (period 1). they have the same income in period 0 of m dollars and they will not earn income in period 1. the interest rate they face is r. larry’s and jeff’s utility functions are as follow. = 0.5 + 0.5 and = 0.5 + 0.5 for each person is between zero and one and represents each consumer’s temporal discount econ 340: intermediate microeconomics. ben van kammen: purdue university. rate. a. write the budget constraint that applies to both jeff and larry in terms of consumption in each period and ), interest rate, and m. b. what is larry’s and what is jeff’s marginal rate of intertemporal substitution? c. what is the slope of the budget constraint? d. write each consumer’s condition for lifetime utility maximization. e. re-arrange the conditions from part (d) to solve for the ratio, . f. if > which consumer will save more of his middle age income? g. if > 1 1+ , in which period will larry consume more: = 0 or = 1?

An employer takes a deduction from your paycheck for federal taxes. where does this money go? -the money is sent to the federal government to pay for goods and services for the community. -the money is sent to the mayor. -the money is sent to the federal government and deposited in a retirement account. -the money is sent to the social security fund.

As task uncertainty and interdependence increase, are a more effective coordination mechanism than