Search File Home Insert Draw Page Layout Formulas Data Review View Help X Cut Calibri 11 AA Wrap Text General Paste Copy M Format Painter Clipboard BIU- A Merge & Center $ % 828 Conditional Format as Cell Formatting table Styles- For R Alignment Number Styles A45 H E A B fx opportunity that would yield a 12% rate of return. Would each division manager want to accept or reject the investment opportuni C D E F H M 1 Performance Evaluation 2 18 points 3 4 In this part of the assessment, you will compute return on investment and residual income. You will then use these results 5 to determine if a company would be better off accepting or rejecting an investment opportunity. 6 7 Situation 8 Sales of 3 different divisions of Dogs R Us are given as follows: 19 Division 1 Division 2 Division 3 10 Sales $ 1,834,726 $ 1,438,751 $ 2,156,520 11 Average Operating Assets $ 546,324 $ 456,235 $ 472,640 12 Net operating income S 68,215 S 51,315 $ 113,000 13 Minimum required rate of returr 11% 9% 18% 14 15 Instructions 16 1. Compute the margin, turnover, and return on investment of each division. Where necessary, carry computations to two decimal places. 17 18 19 20 21 22 23 24 25 26 27 28 Sheet1 Division 1 Division 2 Division 3 N AutoSave Off) File Home Insert & Cut Attempt-Performance Evaluation (1) - Excel Searth Draw Page Layout Formulas Data Review View Help Calibri AA P Wrap Text General Plaste Copy- Format Painter BIU- A- Menge & Center 5-% Formatting table-Styles Conditional Formatas Cell Insert Delete For Clipboard 6 Fot G Aliment Number Cally A45 $ opportunity that would yield a 12% rate of return. Would each division manager want to accept or reject the investment opportunity? A B C D E F G H L M N 0 24 25 26 27 28 Division 3 29 2. Compute the residual income of each division. Where necessary, carry computations to two decimal places. 30 31 32 33 34 Division 1 Division 2 35 3. Assume three division manager at Dogs R Us are being evaluated based on return on investment. Assume they are each presented with an investment 36 opportunity that would yield a 12% rate of return. Would each division manager want to accept or reject the investment opportunity? 37 38 39 40 3b. Explain your answer: 41 Division 1 Division 2 Division 3 44 4. Assume the same three division managers are being evaluated based on residual income. Assume they are each presented with an investment 45 opportunity that would yield a 12% rate of return. Would each division manager want to accept or reject the investment opportunity? 42 43 46 47 48 49 4b. Explain your answer: 50 51 52 Sheet1 Division 1 Division 2 C C Division 3 C Cm C AutoSave on File Home Insert X Cur Copy Attempt Performance Evaluation (1) Exce Search Draw Page Layout Formulas Data Review View Help Calibri 11- AA P Wrap Text General Pat Format Painter BIU- 1410 Merge & Center Clipboard Fort Alignment Number Conditional Format as Cell Formatting Table Styles Styles Imert Crite A45 A B D E 43 opportunity that would yield a 12% rate of return. Would each division manager want to accept or reject the investment opportunity? 44 4. Assume the same three division managers are being evaluated based on residual income. Assume they are each presented with an investment 45 opportunity that would yield a 12% rate of return. Would each division manager want to accept or reject the investment opportunity? M N D G H Division 1 Division 2 Division 3 46 47 48 49 4b. Explain your answer: 50 51 52 53 5. Assume the same three division managers are each presented with an investment opportunity that would yield a 12% rate of return. 54 Would the company want each manager to accept or reject each investment opportunity? 551 56 57 58 Division 1 Division 2 Division 3 59 6. Why might the decisions of a division manager not always align with what is best for the company as a whole? 60 Identify some steps that a division manager could take to resolve this type of dilemma. What do you think is the right thing to do? 61 62 63 64 65 66 67 68 69 70 71 Sheet1