R01D Aralin mong maigi yung solution na na-unlocked ni Master Arcturus. Tinry ko tong isolved kanina magkaiba kami ng sagot ng Author. May napansin din akong weird sa ginawa nung author kaya yun siguro yung main reason bakit kami magkaiba ng mga na-compute na sagot. Dahil dun, mas may tiwala ako sa solution ko. Sana pag kinompute mo to pareho tayo ng maging sagot.
1.
According to DuPont Formula, rate of return on Investment is determined by multiplying
the Profit margin by Investment Turnover. Rate of return on investment for apparel division based on income statement was:
,
Step 2
2.
Managerβs bonus of A Division:
Casual Living Inc.βs overall ROI was 8%
Apparel divisionβs ROI was 15%
Bonus is $9000 for each percentage of exceeded Companyβs overall ROI.
As it exceed, we have to calculate managerβs Bonus as
,
Step 3
Bonus for A Divisionβs manager is $63,000
,
Step 4
3. Rate of return on investment for new product line based on income statement was-
4.
The manager of apparel division decided to reject the new product line because he may feel it will reduce his bonus. But it will not reduce his bonus value instead of it will increase his bonus value as it ROI was exceeded than Companyβs ROI (8%).
Increase in bonus of new product line-
5. Explanation:
Alternative performance measures for motivating division managerβs to accept new investment opportunities can be Balance Scorecard and EVA.