Question
Top management of the Beca Corporation is trying to construct a performance evaluation system to use to evaluate each of its three divisions. This past
Top management of the Beca Corporation is trying to construct a performance evaluation system to use to evaluate each of its three divisions. This past years financial data are as follows:
Division A | Division B | Division C | ||||
---|---|---|---|---|---|---|
Total assets | $1,167,500 | $23,593,500 | $14,056,300 | |||
Noninterest-bearing current liabilities | 65,000 | 2,757,400 | 1,323,000 | |||
Net income | 225,600 | 2,293,200 | 1,719,900 | |||
Interest expense | 65,000 | 2,425,500 | 1,543,500 | |||
Tax rate | 35% | 35% | 35% | |||
Required rate of return | 10% | 12% | 14% |
How would the divisions be ranked (from best to worst performance) if the evaluation were based on net income?
select a division Division ADivision BDivision C has the highest net income, followed by select a division Division ADivision BDivision C and then select a division Division ADivision BDivision C. |
eTextbook and Media
How would the divisions be ranked (from best to worst performance) if the evaluation were based on ROI? (Round answers to 0 decimal places, e.g. 20%.)
Division A | Division B | Division C | ||||
---|---|---|---|---|---|---|
ROI | enter ROI in percentages % | enter ROI in percentages % | enter ROI in percentages % |
select a division Division ADivision BDivision C has the highest ROI, followed by select a division Division ADivision BDivision C and then select a division Division ADivision BDivision C. |
eTextbook and Media
How would the divisions be ranked (from best to worst performance) if the evaluation were based on residual income? (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
Division A | Division B | Division C | ||||
---|---|---|---|---|---|---|
Residual Income | $enter Residual income in dollars | $enter Residual income in dollars | $enter Residual income in dollars |
select a division Division ADivision BDivision C has the highest residual income, followed by select a division Division ADivision BDivision C and then select a division Division ADivision BDivision C |
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