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Sm Ch 25

Satisfactory Essays

CHAPTER 25
REWARDING BUSINESS PERFORMANCE
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL
THINKING CASES
Brief
Exercises
B. Ex. 25.1
B. Ex. 25.2
B. Ex. 25.3
B. Ex. 25.4
B. Ex. 25.5
B. Ex. 25.6
B. Ex. 25.7
B. Ex. 25.8
B. Ex. 25.9
B. Ex. 25.10

Topic
Motivating employee performance
Evaluate business performance using ROI
Comparing ROI and residual income
Balanced scorecard perspectives
Computations for the DuPont model
Criticisms of ROI
Calculate residual income
Calculate EVA
Variable vs. fixed compensation
Components of ROI

Learning
Objectives
25-1, 25-6
25-2, 25-3
25-2, 25-4
25-5
25-3
25-3
25-2, 25-4
25-4
25-6
25-2

Exercises
25.1
25.2
25.3
25.4
25.5

Topic
Accounting terminology
Balanced scorecard activities
Employee …show more content…

Because individual students’ answers will be different, this makes a good class discussion question.

30 Medium

25.3 A,B

Fairfax Industries/Wilson Company
This problem demonstrates the impact of a choice of depreciation method on operating earnings. Because operating earnings are instrumental in determining the performance evaluation and resulting bonus of the manager of a division, the ethics of the choice are considered. 30 Medium

25.4 A,B

Tootsie Roll Industries
This problem demonstrates that information found in annual reports can be used to evaluate business segments. Financial information for computing ROI, capital turnover, and return on sales is included.

20 Medium

25.5 A,B

Fastwhere Inc./Save Some, Inc.
A set of potential investment projects is evaluated on both ROI and residual income measures. The calculations demonstrate that the project rankings are different if residual income is used rather than ROI to rank project attractiveness.

40 Strong

25.6 A,B

Valance Autoparts/Eatwell Restaurant Chain
This problem asks students to role play as a consultant to a firm that is having some problems with the balanced scorecard approach. It is a good problem to be used for a group report or presentation.

40 Strong

25.7 A,B

Hinkley Corporation/Bronson Corporation
Students consider management compensation

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