1. Responsibility Accounting What type of Responsibility centers are i) the 6 divisions, ii) corporate?

2. Measurement issues When you did the ROI, sales margin, capital turnover, and residual income calculations, using the segment information provided in the footnotes, did you use the 1) gross book value (GBV) of the assets, or 2) net book value (NBV) of the assets? How can you tell? (HINT: Look at the Consolidated Balance Sheet on page 81 of the 10k) What is the risk when companies use the NBV for assessing ROI.

ROI ROI by Six Divisions 80.00% 70.00% Division Name FLNA OFNA NAB Latin America ESSA AMENA 76.14% 73.22% 7.62% 16.24% 7.83% 18.22% Sales Margin 30.64% 25.84% 10.80% 14.26% 11.84% 19.86% Capital Turnove Residual Incom 2.49 $0.00 2.83 $0.00 0.71 $5,193.50 1.14 $565.50 0.66 $2,988.50 0.92 $436.25 60.00% 50.00% 40.00% 30.00% II... % 10.00% 0.00% FLNA QFNA NAB Latin America AMENA ROI 2018 2017 $ 10,610 8.900 ASSETS Current Assets Cash and cash equivalents Short-term investments Restricted cash Accounts and notes receivable, net Inventories Prepaid expenses and other current assets Total Current Assets Property, Plant and Equipment, net Amortizable Intangible Assets, net Goodwill Other indefinite-lived intangible assets Indefinite-Lived Intangible Assets Investments in Noncontrolled Affiliates Deferred Income Taxes Other Assets Total Assets 8,721 $ 272 1,997 7,142 3,128 6.33 21,893 17,589 1,644 14,808 14,181 28,989 2,409 4,364 760 77,648 $ 7,024 2.947 1,546 31,027 17,240 1,268 14,744 12,570 27,314 2,042 913 79,804 $ $ $ 4,026 18,112 22,138 28,295 3,499 9,114 63,046 5,485 15,017 20,502 33,796 3.242 11,283 68,823 LIABILITIES AND EQUITY Current Liabilities Short-term debt obligations Accounts payable and other current liabilities Total Current Liabilities Long-Term Debt Obligations Deferred Income Taxes Other Liabilities Total Liabilities Commitments and contingencies Preferred Stock, no par value Repurchased Preferred Stock PepsiCo Common Shareholders' Equity Common stock, par value 1/3 per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1.409 and 1,420 shares, respectively) Capital in excess of par value Retained earnings Accumulated other comprehensive loss Repurchased common stock, in excess of par value (458 and 446 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity 41 (197) 23 3,953 59,947 (15,119) (34,286) 14,518 84 14,602 77,648 $ 24 3,996 52.839 (13,057) (32,757) 11,045 92 10,981 79,804 $