ACC2355 Assignment 4 - ACC2355 Assignment 4 Return on Investment Economic Value Added Objectives Transfer Pricing and Balanced Scorecard(3 This

ACC2355 Assignment 4 - ACC2355 Assignment 4 Return on...

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1 ACC2355 Assignment 4 – Return on Investment, Economic Value Added Objectives, Transfer Pricing and Balanced Scorecard (3%) This assignment relates to the following Course Learning Requirements: CLR 4 – Evaluation and apply theories of performance measurement to reward employee performance. Objective of this Assignment: To apply course material in order to answer questions related to ROI, RI and EVA. Instructions: For this assignment, you are required to answer questions related to 3 problems in order to demonstrate your comprehension of the chapter content and the ability apply this knowledge through calculations. Problem AReturn on Investment and Investment DecisionsLeslie Blandings, division manager of Audiotech Inc., was debating the merits of a new product—a weather radiothat would put out a warning if the county in which the listener lived were under a severe thunderstorm ortornado alert.The budgeted income of the division was $725,000 with operating assets of $3,625,000. The proposed investmentwould add income of $640,000 and would require an additional investment in equipment of $4,000,000. Theminimum required return on investment for the company is 12 percent. Round all numbers to two decimal places.Problem A – Questions:1. Compute the ROl of:a. The division if the radio project is not undertaken.b. The radio project alone.c. The division if the radio project is undertaken.2. Compute the residual income of:a. The division if the radio project is not undertaken.b. The radio project alone.c. The division if the radio project is undertaken
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  • Winter '16
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