Stevens Company Has Two Divisions That Report on a Decentralized

question 31

Essay

Stevens Company has two divisions that report on a decentralized basis. Their results for 2011 were as follows: Required:
Compute the following amounts for each division:
a.
Return on investment (ROI) if the desired rate of return is 12 per cent.
b.
Residual income if the desired rate of return is 20 per cent.
c.
EVA.
d.
Turnover if the desired rate of return is 25 per cent.
e.
Margin for each division if the desired rate of return is 10 per cent.

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Definitions:

Latent Learning

Learning that remains hidden until its application becomes useful.

Creativity

The process of solving problems by combining ideas or behavior in new ways.

Stereotype Threat

The risk of confirming negative stereotypes about an individual's racial, ethnic, gender, or cultural group which can impair their performance.

Confirmation Bias

The tendency to search for evidence that fits one’s beliefs while ignoring any evidence that does not fit those beliefs.