Perth Electronics Company Allows Its Divisions to Operate as Autonomous

question 3

Essay

Perth Electronics Company allows its divisions to operate as autonomous units.The operating data for 2017 follow:
$$\begin{array} { | l | r | r | r | } \hline & { \text { TVs } } & \text { Photography } & { \text { Computers } } \\\hline \text { Revenues } & \$ 4500000 & \$ 1000000 & \$ 9600000 \\\hline \text { Accounts receivable } & 1600000 & 305000 & 2870000 \\\hline \text { Operating assets } & 2000000 & 800000 & 3500000 \\\hline \text { Net operating profit } & 440000 & 120000 & 960000 \\\hline \text { Taxable income } & 330000 & 180000 & 770000 \\\hline\end{array}$$
Required:
a.Calculate the investment turnover for each division.
b.Calculate the return on sales for each division.
c.Calculate the return on investment for each division.
d.Which division manager is doing best? Why?
e.What other factors should be included when evaluating the managers?
For parts (b)and (c)income is defined as operating profit.
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Definitions:

Event

In probability and statistics, an outcome or a set of outcomes of a random experiment; an event defines a specific occurrence within a sample space.

Probability Theory

The branch of mathematics that deals with the analysis of random phenomena and the likelihood of various outcomes.

Outcome

The result or consequence of an experiment or action, often considered in the context of probabilities.

Sample Space

The set of all possible outcomes or results in a statistical experiment or random trial, from which samples can be drawn for analysis.