The Water Management Company Has Two Operating Divisions, the Service

question 80

Essay

The Water Management Company has two operating divisions, the Service Division and the Irrigation Division. The company evaluates the performance of its divisions using the return on investment (ROI) measure. The following information pertains to the two divisions as of the end of the current year.The average service fee was $50.00 per unit for the Service Division, while the average selling price of an irrigation system was $5,000 for the Irrigation Division. The company requires a minimum return on investment of 12%.Required:
Compute the return on investment (ROI) measure for both divisions and the company as a whole. Based on ROI alone which division had the better performance? (Round ROI measures to the nearest whole percent.)

Understand the relationship between economic profits, average total cost, and market prices in determining firm behavior in the long run.

Predict market adjustments in response to changes in cost and demand in both short and long run.

Understand the characteristics and symptoms of generalized anxiety disorder (GAD).

Identify different types of anxiety disorders and distinguish them from one another.

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Definitions:

Calculated

Pertains to something determined through the use of mathematical methods or a process of careful thought and consideration.

Generic Brands

Products that are sold under a retailer’s brand name rather than a manufacturer’s brand name, usually at a lower price and with simpler packaging.

National Brands

Brands that are marketed and recognized across an entire country, offering a consistent product or service experience nationwide.

Exclusive Distribution

A strategy where a product is distributed through a single wholesaler or retailer in a specific geographic area, limiting the number of outlets to maintain exclusivity.