RH Bhd is just starting up. The management team has decided from the beginning that decentralization was the preferred organizational style and has made this clear in all interviews and discussions with potential employees. Mr. Pang, the CEO, is unsure about the best way to evaluate his division managers. He has heard the terms return on investment, residual income, economic value added, and flexible budgets but wants to know the pros and cons of each. Electronic Telephone Systems (ETS), a division of RH Bhd buys and installs modular office components. For the most recent year, the division had the following performance targets: Asset turnover 2.5 Profit margin 6% Target rate of return on investments for RI 13% Cost of capital 10% Income tax rate 10%
RH Bhd is just starting up. The management team has decided from the beginning that decentralization was the preferred organizational style and has made this clear in all interviews and discussions with potential employees. Mr. Pang, the CEO, is unsure about the best way to evaluate his division managers. He has heard the terms return on investment, residual income, economic value added, and flexible budgets but wants to know the pros and cons of each. Electronic Telephone Systems (ETS), a division of RH Bhd buys and installs modular office components. For the most recent year, the division had the following performance targets: Asset turnover 2.5 Profit margin 6% Target rate of return on investments for RI 13% Cost of capital 10% Income tax rate 10%
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter14: The Balanced Scorecard And Corporate Social Responsibility
Section: Chapter Questions
Problem 8E: Coulson and Company is a large retail business that has a firm-wide balanced scorecard. Recently,...
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