Alpha Division of National Company’s operating results include: controllable margin, P200,000; sales P2,200,000; and operating assets, P800,000. The Alpha Division’s ROI is 25%. Management is considering a project with sales of P100,000, with variable cost ratio of 60%, fixed costs of P40,000; and an asset investment of P150,000. Should management accept this new project?   No, since a loss will be incurred. Yes, since additional sales always mean more customers. Yes, since ROI will increase. No, since ROI will be lowered.

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Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.