Judgmental Factors in ROI

Judgmental Factors in ROI - the performance of an...

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Judgmental Factors in ROI The return on investment approach includes two judgmental factors:  1.   Valuation of ope may be valued at  appraised value, o bases are readily  records. 2.  Margin (income) measure.  This measure may be controllable  operations, or net income. Each of the alternative values for operating assets can provide a reliable basis for evaluating a  manager's performance as long as it is consistently applied between reporting periods. However, the  use of income measures other than controllable margin will not result in a valid basis for evaluating 
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Unformatted text preview: the performance of an investment center manager. Improving ROI The manager of an investment center can improve ROI by increasing controllable margin, and/or reducing average operating assets. To illustrate, we will use the following assumed data for the Laser Division of Berra Manufacturing. Illustration 21-25 Assumed data for Laser Division...
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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Judgmental Factors in ROI - the performance of an...

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