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Question 7 of12 - i 5 E View Policies Current Attempt in Progress Paula Boothe. president of the Pina Corporation, has mandated a minimum 8% return on investment for any project undertaken by the company. Given the com pany's decentralization, Paula leaves all investment decisions to the divisional managers as long as theyI anticipate a minimum rate of return of at least 10%. The Energy Drinks division. under the direction of manager Martin Koch, has achieved a 14% return on investment for the past three yea rs. This year is not expected to be different from the past three. Koch has just received a proposal to invest $1,974,000 in a new line of energy drinks that is expected to generate $2 20,900 in operating income. (6!) Calculate the residual income for the proposed new line of energy drinks. Residual income $ eTexthook and Media Save for Later Attempts: 0 of 3 used Submit Ari" (bl If Martin Koch is evaluated based on residual income. will he choose to invest in the new line ofenergy drinks? eTexthook and Media Save for Later Attempts: 0 of 3 used Submit An- Question 8 of 12 - 15 5 Sandhill Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales Sales revenue $9,990,000 $3,940,000 $3,140,000 Variable expenses 3,940,000 1,490,000 1,790,000 Direct fixed expenses 4,440,000 990,000 1,190,000 Average assets 7,940,000 3,940,000 1,750,000 Required rate of return 10% 10% 10% (a) Calculate the current residual income for each distribution channel. (If the residual income is a loss then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Residual Income Retail $ Online $ Catalog eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b). The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost $790,000 and is expected to generate $154,000 in additional annual segment margin. Calculate the residual income of each distribution channel assuming it purchases the new customer relationship management system. (If the residual income is a loss then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Residual Income to Retail LA Online $ Catalog eTextbook and Media Save for Later Attempts: 0 of 3 used Submit AnswerQuestion 9 of 12 -/5 E View Policies Current Attempt in Progress O'Brien's Bed and Breakfast operates a small inn in Wilmington, North Carolina. Kay O'Brien knows that customer service and customer satisfaction are the keys to staying in business. Indicate by placing an X in the appropriate column whether the following measures are leading or lagging, qualitative or quantitative indicators of customer satisfaction for O'Brien's Bed and Breakfast: Leading Lagging Qualitative Quantitative a. Customer satisfaction score V V V v b. Guest room cleanliness score V V v c. Annual investment in linens V V V v d. Employee retention V V V V e. Return visits per year V V V V f. Time to respond to reservation requests V V V v g. Percentage of guest rooms ready at checkin V V V V h. Employee satisfaction V V V v i. Customer referrals per year V V V v eTextIJook and Media Save for Later Attempts: Oof3 used Question 11 of12 - I 5 E View Policies Current Attempt in Progress Taylor Construction builds custom homes in Dallas, Texas. Brandon Taylor knows that his future depends on the quality of the homes he builds and the service he provides to customers. Most new-customer sales arise from word-of-mouth advertising by former customers. Identify the balanced scorecard perspective for each measure in the exercise. Perspective a. Number of customer complaints V b. Employee turnover V c. Net prot per house constructed V d. Turnaround time on customer design changes V e. Hours of training per employee V f. Average labor cost per house V g. Dollars invested in new equipment V h. Grade (quality) of brass xtures V i. Variances between budgeted and actual costs of building a house V eTextbook and Media Save for Later Attempts: 0 of 3 used Question 12 of 12 -15 5 View Policies Current Attempt in Progress Flounder Copy offers walk-in copying and binding services to small businesses that cannot afford to provide those services in-house. Following is a typical schedule for a 50-copy spiral-bound job: Activity Minutes Processing order 21 Waiting for copying to begin 22 Copying 17 or binding 27 Binding 14 Packing for customer 6 (a) Calculate the delivery cycle time. Delivery cycle time minutes (b) Calculate the manufacturing cycle time. Manufacturing cycle time minutes eTextbook and Media Save for Later Attempts: 0 of 3 used Submit

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