91Ó°ÊÓ

The income from operations and the amount of invested assets in each division of Devon Industries are as follows: \begin{tabular}{lcr} & Income from Operations & Invested Assets \\ \hline Sporting Goods Division & \(\$ 80,000\) & \(\$ 400,000\) \\ Health Care Division & 41,600 & 260,000 \\ Commercial Division & 70,400 & 320,000 \end{tabular} a. Compute the rate of return on investment for each division. b. Which division is the most profitable per dollar invested?

Data for the North, South, East and West divisions of McGonigel Company are as follows: \begin{tabular}{lcccccc} & Sales & Income from Operations & Invested Assets & Rate of Return on Investment & Profit Margin & Investment Turmover \\ \hline North & \(\$ 525,000\) & (a) & (b) & \(18 \%\) & \(12 \%\) & (c) \\ South & (d) & \(\$ 65,000\) & (e) & (f) & \(10 \%\) & \(1.25\) \\ East & \(\$ 700,000\) & (g) & \(\$ 350,000\) & \(15 \%\) & (h) & (i) \\ West & \(\$ 800,000\) & \(\$ 140,000\) & \(\$ 1,000,000\) & (j) & (k) & (l) \end{tabular} a. Determine the missing items, identifying each by the letters (a) through (l). Round whole percents to one decimal place and investment turnover to two decimal places. b. Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is \(10 \%\). c. Which division is the most profitable in terms of (1) return on investment and (2) residual income?

American Express Company is a major financial services company, noted for its American Express card. Below are some of the performance measures used by the \(^{\circledR}\) company in its balanced scorecard. \(\begin{array}{ll}\text { Average cardmember spending } & \text { Number of merchant signings } \\ \text { Cards in force } & \text { Number of card choices } \\ \text { Earnings growth } & \text { Number of new card launches } \\ \text { Hours of credit consultant training } & \text { Return on equity } \\ \text { Investment in information technology } & \text { Revenue growth } \\ \text { Number of Internet features } & \end{array}\) For each measure, identify whether the measure best fits the innovation, customer, internal process, or financial dimension of the balanced scorecard.