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IntroductionEnager Industries Ltd (Enager) was a relatively young company whom manufactured and produced products/ work within three ingredients- Consumer Products, Industrial Products and Professional Services. Consumer Products, the oldest among the three divisions in Enager, designed, manufactured and marketed a line of houseware items. Industrial Products built wiz of a kind machine tools to customer specifications. Professional Services, the newest among the three, provided some(prenominal) kinds of engineering services and this division had grown rapidly because of its ability to perform environmental impact studies. Each division was enured as an essenti anyy independent company but all new project proposals requiring investment in excess of $1,500,000 had to be reviewed by the Chief Financial Officer, enthalpy Hubbard. AnalysisCarl Randall, Enagers president, had change the three distinctly separate divisions from being treated as profit centers into investment centers in 1992 at the urging of Henry Hubbard. The change enabled the three divisions to use ROA (Return on Assets) as a performance measure of the success of each division. The ROA was defined to be the divisions net income divided by its aggregate assets the division used to generate its profits.

The net income for a division was calculated by taking the divisions select income before taxes, subtracting the divisions share of corporate administrative expenses and its share of income tax expenses. On the other hand, the total assets of a division was calculated by taking the divisions assets, including receivables and the allocated corporate-office assets, including the centrally controlled cash account, based on the basis of divisional revenues. In addition, all fixed assets were recorded at their relaxation sheet values- original cost less accumulated genuine line depreciation. Based on these calculation techniques, the sum of divisional net income and assets were equal to the... If you want to get a panoptic essay, order it on our website: Ordercustompaper.com

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