Stevens Company Has Two Divisions That Report on a Decentralized

Essay

Stevens Company has two divisions that report on a decentralized basis. Their results for 2011 were as follows: $\begin{array}{lcc}&\text { Helmet } & \text { Ball } \\\text { Sales } & £ 150,000 & £ 300,000 \\\text { Income } & £ 15,000 & £ 45,000 \\\text { Asset base } & £ 75,000 & £ 150,000 \\\text { Weighted average cost of capital } & 12 \% & 12 \%\end{array}$
a.Return on investment (ROI) if the desired rate of return is 12 per cent.
b.Residual income if the desired rate of return is 20 per cent.
c.EVA.
d.Turnover if the desired rate of return is 25 per cent.
e.Margin for each division if the desired rate of return is 10 per cent.