Please answer ALL requirements.
P23-31 (final answer) Question Help 0 News World Group has two major divisions: Print and Internet. Summary financial data (in millions) for 2013 and 2014 are as follows: (Click the icon to view the data.) The two division managers' annual bonuses are based on division ROI (defined as operating income divided by total assets). If a division reports an increase in ROI from the previous year, its management is automatically eligible for a bonus, however, the management of a division reporting a decline in ROI has to present an explanation to the News World Group board and is unlikely to get any bonus. Carol Mays, manager of the Print division, is considering a proposal to invest $775 million in a new computerized news reporting and printing system. It is estimated that the new system's state-of-the-art graphics and ability to quickly incorporate late-breaking news into papers will increase 2015 division operating income by $144 million. News World Group uses a 16% required rate of return on investment for each division. Read the requirements Requirement 1. Use the DuPont method of profitability analysis to explain differences in 2014 ROls between the two divisions. Use 2014 total assets as the investment base. Calculate the ROI for both divisions in 2014. (Enter the ROls as ratios rounded to three decimal places, X.XXX.) ROI Print Enter any number in the edit fields and then click Check Answer. 7 parts 1 remaining Clear All Check Answer i Data Table - X Operating Income 2013 2014 $ 3,770 $ 5,850 550 754 Revenues 2013 2014 18,500 $ 18,000 25,100 26,000 Total Assets 2013 2014 18,300 $ 22,500 11,450 13,000 $ $ Print Internet Print Print Done Requirements 1. Use the DuPont method of profitability analysis to explain differences in 2014 ROls between the two divisions. Use 2014 total assets as the investment base. Why might Mays be less than enthusiastic about accepting the investment proposal for the new system, despite her belief in the benefits of the new technology? Evan Burleson, CEO of News World Group, is considering a proposal to base division executive compensation on division RI. a. Compute the 2014 RI of each division. b. Would adoption of an RI measure reduce Mays' reluctance to adopt the new computerized system investment proposal? Burleson is concerned that the focus on annual ROI could have an adverse long-run effect on News World Group's customers. What other measurements, if any, do you recommend that Burleson use? Explain briefly. Print Done P23-31 (final answer) Question Help 0 News World Group has two major divisions: Print and Internet. Summary financial data (in millions) for 2013 and 2014 are as follows: (Click the icon to view the data.) The two division managers' annual bonuses are based on division ROI (defined as operating income divided by total assets). If a division reports an increase in ROI from the previous year, its management is automatically eligible for a bonus, however, the management of a division reporting a decline in ROI has to present an explanation to the News World Group board and is unlikely to get any bonus. Carol Mays, manager of the Print division, is considering a proposal to invest $775 million in a new computerized news reporting and printing system. It is estimated that the new system's state-of-the-art graphics and ability to quickly incorporate late-breaking news into papers will increase 2015 division operating income by $144 million. News World Group uses a 16% required rate of return on investment for each division. Read the requirements Requirement 1. Use the DuPont method of profitability analysis to explain differences in 2014 ROls between the two divisions. Use 2014 total assets as the investment base. Calculate the ROI for both divisions in 2014. (Enter the ROls as ratios rounded to three decimal places, X.XXX.) ROI Print Enter any number in the edit fields and then click Check Answer. 7 parts 1 remaining Clear All Check Answer i Data Table - X Operating Income 2013 2014 $ 3,770 $ 5,850 550 754 Revenues 2013 2014 18,500 $ 18,000 25,100 26,000 Total Assets 2013 2014 18,300 $ 22,500 11,450 13,000 $ $ Print Internet Print Print Done Requirements 1. Use the DuPont method of profitability analysis to explain differences in 2014 ROls between the two divisions. Use 2014 total assets as the investment base. Why might Mays be less than enthusiastic about accepting the investment proposal for the new system, despite her belief in the benefits of the new technology? Evan Burleson, CEO of News World Group, is considering a proposal to base division executive compensation on division RI. a. Compute the 2014 RI of each division. b. Would adoption of an RI measure reduce Mays' reluctance to adopt the new computerized system investment proposal? Burleson is concerned that the focus on annual ROI could have an adverse long-run effect on News World Group's customers. What other measurements, if any, do you recommend that Burleson use? Explain briefly. Print Done
