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Constructing a performance evaluation system

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You are a manager at the Regional Med - a manufacturer of cancer detection systems and are tasked with constructing a performance evaluation system used to evaluate each of the three divisions under your direction; namely Mammography, X-Ray Imaging and Computed Tomography.

The data are follows:

MAMMOG. X-RAY TOMOGRAPHY

TOTAL ASSETS 900,000 18,000,000 11,500,000

NET INCOME 55,000 3,000,000 4,050,000

INTEREST EXP. 178,000 220,000 999,0000

TAX RATE 40% 40% 40%

REQ RATE 15% 20% 25%

-How would you rank the divisions if they are based on net income?

-How would you rank the divisions from best to worst if based on residual income?

-How would you rank the divisions in terms of return on investment?

-The boss wants to give one division an award for their performance, generally defined. A manager insists ROI should be used. She is your good friend and is in charge of Mammography. Do you take her advice? Why or why not?

 

Reference no: EM132602385

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