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:

Gain Resources

To obtain additional resources or assets that improve one’s condition or position.

Stalking

Repeated, unwelcome intrusions that create concern for personal safety and fear in the target.

Verbal Aggression

The use of communication to attack another person’s self-concept.

Personal Safety

Measures and precautions taken by individuals to ensure their physical and psychological well-being.