National Can Company Has Three Divisions, Eastern, Midwestern, and Western

question 12

Essay

National Can Company has three divisions, Eastern, Midwestern, and Western. Because of very different accounting methods and inflation rates in different countries it is considering multiple evaluation measures. Information gathered about the divisions for the year just ended follows: The company is currently using a required rate of return of 15 percent.
Required:
A) Compute the ROI using both book value and current value for all divisions. Round to three decimal places.
B) Compute residual income using book value and current value for all divisions.
C) Does book value or current value provide the better basis for performance evaluation? Why? Which division is the most successful?

• A) Compute the ROI using both book value and current value for all divisions. Round to three decimal places.
• B) Compute residual income using book value and current value for all divisions.
• C) Does book value or current value provide the better basis for performance evaluation? Why? Which division is the most successful?

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Definitions:

Cross-cultural Differences

Variations in norms, values, practices, and customs between people from different cultural backgrounds.

Psychological Needs

Fundamental human requirements for mental well-being, including autonomy, competence, and relatedness.

Autonomous Motivation

A type of motivation that comes from within an individual, driven by personal interest, enjoyment, or inherent satisfaction in the task itself.

Relationships

The way in which two or more people or groups regard and behave toward each other.