Managerial Accounting Crosson Needles
Not what you're looking for?
Sevilla Consulting offers environmental consulting services worldwide. The managers of branch offices are rewarded for superior performance with bonuses based on the economic value that the office adds to the company. Last year's operating results for the results for the entire company and for its three officers, expressed in millions of U.S. dollars as are follows:
Worldwide Europe Americas Asia
Cost of Capital 9% 10% 8% 12%
Total Assets $210 $70 $70 $70
Current Liabilities $80 $10 $40 $30
After-tax operating income $15 $5 $5 $5
1. Compute the economic value for each office worldwide. What factors affect each office's economic value added? How can an office improve its economic value added?
2. If manager's bonuses are based on economic value added to office performance, what specific action will managers be movitated to take?
3. Is economic value added the only performance measure needed to evaluate investment centers adequately? Explain your response.
6 and 287.
Purchase this Solution
Education
- MPhil, Madurai Kamaraj University
- MCom, Annamalai University
- IATA, International Air Transport Association
Recent Feedback
- "Great explanations on how the answers were obtained."
- "Love the way she explains everything step by step."
- "Solutions were thoroughly explained."
- "Excellent explanations of how problems are solved"
- "Thanks"
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Motivation
This tests some key elements of major motivation theories.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.