Stevens Company Has Two Divisions That Report on a Decentralized

question 85

Essay

Stevens Company has two divisions that report on a decentralized basis. Their results for 2004 were as follows:
Required:
Compute the following amounts for each division:

a.
Return on investment (ROI) if the desired rate of return is 12 percent.
b.
Residual income if the desired rate of return is 20 percent.
c.
EVA.
d.
Turnover if the desired rate of return is 25 percent.
e.
Margin for each division if the desired rate of return is 10 percent.

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Definitions:

Empathy

The ability to understand and share the feelings of another person, which is crucial in building rapport and trust in sales and customer service.

Human Skills

The seller’s ability to work with and through other people.

Deadly Sins

Traditionally, a classification of the most serious vices in Christian teachings, which are believed to sever the connection with God.

Over Planning

The practice of spending too much time or effort on planning, which can sometimes lead to diminished efficiency or missed opportunities.