Moto Corp Allows Its Divisions to Operate as Autonomous Units

question 108

Essay

Moto Corp allows its divisions to operate as autonomous units.The operating data for 2015 follow:
$$\begin{array} { | l | r | r | r | } \hline & \text { Plows } & \text { Tractors } & \text { Combines } \\\hline \text { Revenues } & \$ 2,250,000 & \$ 500,000 & \$ 4,800,000 \\\hline \text { Accounts receivable } & 800,000 & 152,500 & 1,435,000 \\\hline \text { Operating assets } & 1,000,000 & 400,000 & 1,750,000 \\\hline \text { Net operating income } & 220,000 & 60,000 & 480,000 \\\hline \text { Taxable income } & 165,000 & 90,000 & 385,000 \\\hline\end{array}$$ Required:
a.Compute the investment turnover for each division.
b.Compute the return on sales for each division.
c.Compute 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 income.

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Definitions:

Egocentrism

A cognitive characteristic where an individual has difficulty understanding or assuming any perspective other than their own.

Irreversibility

The concept that some processes or actions cannot be undone or returned to their original state.

Egocentric Thinking

A way of thinking in which a person views everything in relation to themselves, without considering the perspectives or feelings of others.

Conservation

The understanding that certain properties of an object or substance do not change when its appearance is altered in some superficial way, essential in cognitive development according to Piaget.