Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Conflict Between Performance Evaluation and Use of NPV [LO 7]
Division managers at Creighton Aerospace are evaluated and rewarded based on ROI (return on investment) targets. In the current year, Delmar Richards, the president of the commercial products division, has an ROI target of 12 percent. If the division has an ROI of 12 percent or greater, Delmar will receive 250,000 options on Creighton stock in addition to a base salary of $400,000. The commercial products division is considering a major investment in product development, which has a net present value of $25,000,000. However, the investment will have a negative effect on reported profit over the next two years, after which the investment will begin to have a significant positive effect on firm profitability for the next eight years. What is the potential conflict between the company’s evaluation/compensation system and Delamr's focus on the NPV of the investment in product development? Suppose Delmar currently holds stock in Creighton Aerospace with a market value of $1,250,000 and has options on 500,000 shares (awarded in previous years). Is this likely to exacerbate or mitigate the conflict you discussed in part (a)?
when market value is $40 per share. Prior to split, Abbott had 50,000 shares of $10 par value common stock issued and outstanding. After split, Find the par value of the stock
Determine an equation for electricity cost (Y) as a function of units produced (X). Assume a linear function and Using your equation, forecast electricity cost at a volume of 29,000 units produced.
Prepare at least two tables, using Revenue cycle that would be used in a database for accounting cycle.
During the current year, Horton reported operational income of $160,000 and dividend income from Juvyn of $160,000 and dividend income from Juvyn of $27,000. At the same time, Juvyn reported operational income of $50,000 and dividend income from H..
white corporation, a closesly help personal service corporation has $150000 of passive losses, $120000 of active business income and $30000 of portfolio income. Explain how much of the passive loss may white corporation deduct
Record each of the transactions for Bennett Corporation in a journal.
Determine the transfer price per pound of recycled aluminum. Consider that each division is considered a profit center; could the fabrication manager decide to purchase 10,000 pounds next month from Metalife?
Show whether Loewen Group expansion from funeral homes to cemeteries affected its vertical or horizontal boundaries or both.
The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's prepaid insurance as of December 31, 20X8?
what is the impact if ENDING WORK IN-PROCESS INVENTORY increases by 20%? assume that all other inventory balances as given remain the same.
What are the three required conditions for a contingent liability to exist? Illustrate what is one contingency that an auditor would be concerned with and how would the auditor become aware of this contingency?
. tentative lease terms for payments of $500,00 at the end of each year. the salvage value for the computer is $300,000. What are the NAL and the IRR of the lease? Interprete each value
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd