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please show all work and do all parts. thanks 24-38. ROI, RI, DUPONT METHOD, INVESTMENT DECISIONS, BALANCED SCORECARD. News Report Group has two major divisions:
please show all work and do all parts. thanks
24-38. ROI, RI, DUPONT METHOD, INVESTMENT DECISIONS, BALANCED SCORECARD. News Report Group has two major divisions: print and Internet. Summary financial data (in millions) for 2019 and 2020 are as follows: Insert Home A 1 Page Layout Formulas Data Review B D E Operating Income Revenues 2019 2020 2019 2020 $3,720 $4,500 $18,700 $22,500 525 690 25,000 23,000 View G H Total Assets 2019 2020 $18,200 $25,000 11,150 10,000 2 3 Print Internet 4 a 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 Report Group board and is unlikely to get any bonus. Carol Mays, manager of the print division, is considering a proposal to invest $2,580 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 2021 division operating income by $360 million. News Report Group uses a 10% required rate of return on investment for each division Required 1. Use the DuPont method of profitability analysis to explain differences in 2020 ROIs between the two divisions. Use 2020 total assets as the investment base. 2. 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? 3. John Mendenhall, CEO of News Report Group, is considering a proposal to base division executive compensation on division RI. a. Compute the 2020 RI of each division. b. Would adoption of an RI measure reduce Mays' reluctance to adopt the investment proposal for the new computerized systemStep by Step Solution
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