explain how return on investment might lead a divisional manager to reject new investments
Q: Using the above data, answer the following questions: a. Has the manager over-performed or…
A: Hi, since you have posted a question with multiple sub-parts, we will answer the first three, as per…
Q: Discuss some of the key factors which may indicate to a manager that it’s time for structural…
A: Answer: Structural changes in any organization apply to improvements in the company’s organizational…
Q: Under what type of financial risks you would put these risk factors? Economic Distress…
A: A risk is something that can cause a possible loss or damage to an individual or a corporation and…
Q: Which of the following situations is most likely to pose a problem for companies that use return on…
A: Return on investment is computed as the average return generated dividend by the investment made in…
Q: Managers in which of the following responsibility centers are held responsible forprofits? (You may…
A: C. Profit centers is the answer
Q: Which is not one of the potential advantages of decentralization? a. Improves motivation and…
A: Decentralization refers to process in which person in management hierarchy ranging from top to…
Q: Senior management is concerned that solely focus on ROI in measuring divisional performance could…
A: When we talk about the metrics and performance indicators that can be used to measure the success of…
Q: In a management setting, does Transfer Pricing affects the previous topics - Absorption & Variable,…
A: Transfer pricing is the strategy which is adopted by the company in order to charge the amount for…
Q: Which of the following is not an objective or potential advantage of transfer pricing? A) A…
A: In simple words transfer pricing represent the price that one division of company should charge to…
Q: Required information Skip to question Restructure, Outsource or Redesign? Choosing a…
A:
Q: What is turnover? What does it measure? Describe this in your own words. Writing a formula is not a…
A: What is the Turnover Turnover is the Gross sale made by the company. A company may selling the…
Q: What is return on marketing investment (rOMI)? howdoes considering marketing as an investment…
A: Return on marketing expenditure, or ROMI, is an indicator utilized to evaluate the success of a…
Q: computing ROI,
A: In computing ROI, land held for future use Correct Answer Is A considered a nonoperating asset.
Q: What questions should managers answer when considering outsourcing?
A:
Q: Which of the following is a good choice for a manager interested in fostering the cooperation of two…
A: At times the managers of companies may have to seek cooperation between different departments of the…
Q: Explain why it is important in performance evaluation to distinguish between investment centers and…
A: Return on investment (ROI): Return on investment evaluates how efficiently the assets are used in…
Q: Calculate the return on investment for each division. If required, round the ROI to the nearest…
A: Return on Investment is the Income which the Company has Earned for the investment on the project,…
Q: Which of the following is not a benefit of budgeting? a. It sets some standards to evaluate…
A: Budgeting is the activity of planning of costs and expenses for an entity. It is one of the most…
Q: What is the fundamental flaw in utilizing income from operations as a success metric for investment…
A: Introduction: Investment centers are companies that make investments to boost their profits.
Q: What is the primary disadvantage of utilizing revenue from operations to evaluate investment…
A: Investment centers are businesses that invest in other companies to boost their profits.
Q: If ROI is used to evaluate a manager’s performance for a relatively new division, which of the…
A: The correct option is b that is, Net book value using accelerated rather than straight-line…
Q: and explaint the following agency problems in the context financing an entrepreneurial firm: A.…
A: An agency dilemma is a conflict of interest that exists in every connection in which one person is…
Q: What is the strategic value of the DuPont chart?
A: The DuPont chart, which was popularized by the DuPont Corporation, is a framework for analyzing…
Q: ent center manage
A: Rate of investment :money is a metric that's wide wont to live the likelihood of gaining a come…
Q: In what ways might using ROI as a performance indicator for investment centers lead to poor…
A: ROI: It measures the amount of return on a specific investment to the cost of the investment. The…
Q: Which of the following statements is NOT a benefit of return on investment (ROI) as a measure of the…
A: Investment- An investment is a type of asset created by an investor using his or her own money and…
Q: Discuss the importance of measuring and managing marketing return on investment?
A: Marketing return on investment is refer as the return on investment generate from marketing…
Q: Wouldn't it be beneficial for the company if both investment turnover and return on investment are…
A: Ratio analysis is the measure through which company is able to take decision for the future policies…
Q: In a management setting, does Transfer Pricing affects Absorption & Variable, Budgeting, and…
A: Transfer Pricing Transfer prices are required when profit centres are utilised to determine the…
Q: A good performance measurement system should have the following characteristics: It should be based…
A: Good performance measurement must be established because the absence of a good performance…
Q: CPAs, Inc. BOR, a decentralized organization, is interested in evaluating the performance of the two…
A: Number of paychecks Amount ($) Total expense for Payroll Office $29,250 Expenses allocated…
Q: Which of the following describes the goal that should be pursued when setting transfer prices?…
A: Solution: Goal that should be pursed when setting transfer prices is "Establish incentives for…
Q: when a firm might use a single hurtle rather than different divisional or business unit rates. When…
A: Hurdle rate is the rate at which the upcoming or potential projects are evaluated. In other words,…
Q: we considered different allocation methods and considered which one might be “better.” Why might a…
A: The direct allocation method is a way of charging the cost of service departments to other areas of…
Q: Reasons for decentralization do not include which of the following? Ease of gathering and using…
A: Decentralization represents the process of allocation of a portion of responsibility and authority…
Q: Residual income is better measure for performance evaluation of an investments center manager than…
A: Correct Option is 2nd - Desirable investments decisions will not be neglected by high-return…
Q: The use of market price in internal transfers, generally, provides managerial incentive and leads to…
A: Market price refers to the price that is prevailing in the market in normal conditions considering…
Q: Which of the following is not a benefit of budgeting? It allows for coordination between…
A: Budgeting is a process to prepare the financial statement by the manager to estimate the…
Q: The best measure for evaluating the effectiveness of a manger in an investment center would be A.…
A: Responsibility Center is division of organization into different center with each center responsible…
Q: evaluated only on ROI.
A: ROI is the return on investment made by entity.
Q: Which of the following statements doesn't describe the organizational strategies: Select one: O a.…
A: Organisational strategies may be defined as long term plans formed by the organisation to channelise…
Q: Please explain a major shortcoming of using income from operations as a performance measure for…
A: Invesment centers are those units or organisations that a business will utilise its capital to…
Q: Which of the following statement(s) is/are not true? i. Return On Investment (ROI) as a…
A: i. Return On Investment (ROI) as a performance measure may discourage managers of divisions with…
Q: In what way can the use of ROI as a performance measure for investment centers lead to baddecisions?
A: Return On Investment (ROI): It is a measure on the amount of return on a particular investment with…
Q: way a manager could improve turnover
A: Turnover is a important term used in accounting, taxation and business. The success of the business…
Q: What questions should managers answer when considering dropping a product or segment?
A: Drop or Keep Decision: When a product or segment of a business is costing more money than earning,…
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- What questions should managers answer when considering outsourcing?What should an organization do if performance measures change? A. Make sure that the manager being evaluated is aware of the measurement change, as this may affect his or her decision-making. B. Make sure that the manager benefits without the corporation also benefitting. C. Make sure that there are significant overriding opportunities for each manager, if the manager is unaware of the change. D. Obtain customer surveys on the change before communicating the change to the manager.Which of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize production
- Components of the organization that are demotivating for purposes of performance management are known as ______. A. business goals B. strategic plans C. uncontrollable factors D. incentivesExplain and give an example as to how a manager can manipulate the return on investment figure in the short run. Why are these manipulations bad for the company in the long run? Suggest some alternative performance evaluation and compensation schemes.Discuss how the behavior of division managers is likely to be affected by the use of: a. Return on Investment as a Performance Measure b. Residual Income as a performance measure (CMA Adapted)
- Explain why it is important in performance evaluation to distinguish between investment centers and their managers.Wouldn't it be beneficial for the company if both investment turnover and return on investment are used simultaneously since both tools can improve the decision-making of the management?Which of the following statements regarding responsibility accounting systems is true? O Residual income is best used when evaluating the performance of profit centers rather than investment centers. An advantage of using return on investment to evaluate performance is that it encourages managers to increase both operating assets and operating income. O The use of residual income as a performance measure may lead segment managers to reject investments in projects that would be favorable for the company as a whole. O Residual income is a less effective metric for evaluating performance if there are significant differences in the size of the operating segments. O None of the above statements is true.
- Which of the following situations is most likely to pose a problem for companies that use return on investment as a measure of a manager’s performance? a. Managers may be encouraged to purchase more operating assets than they otherwise should. b. Managers may be discouraged from purchasing operating assets that could improve overall profitability. c. Managers may be discouraged from reducing their division’s costs. d. Managers may be discouraged from paying off debt in order to reduce costsHow can conflicts arise between the decision model used by a manager and the performance evaluation model used to evaluate that manager?Which of the following promotes goal congruence (aligned goals between segment managers and top management)? Residual Income as a performance evaluation measure O Return on Investment as a performance evaluation measure A positive residual income means O the investment has exceeded management's expectations based on their target rate of return. O the investment has not met management's expectations based on their target rate of return. O A positive or negative residual income does not tell us whether management's expectations were met.