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Moto Corp Allows Its Divisions to Operate as Autonomous Units

Question 76

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Moto Corp allows its divisions to operate as autonomous units.The operating data for 2015 follow:
 Plows  Tractors  Combines  Revenues $2,250,000$500,000$4,800,000 Accounts receivable 800,000152,5001,435,000 Operating assets 1,000,000400,0001,750,000 Net operating income 220,00060,000480,000 Taxable income 165,00090,000385,000\begin{array} { | l | r | r | r | } \hline & \text { Plows } & \text { Tractors } & \text { Combines } \\\hline \text { Revenues } & \$ 2,250,000 & \$ 500,000 & \$ 4,800,000 \\\hline \text { Accounts receivable } & 800,000 & 152,500 & 1,435,000 \\\hline \text { Operating assets } & 1,000,000 & 400,000 & 1,750,000 \\\hline \text { Net operating income } & 220,000 & 60,000 & 480,000 \\\hline \text { Taxable income } & 165,000 & 90,000 & 385,000 \\\hline\end{array} Required:
a.Compute the investment turnover for each division.
b.Compute the return on sales for each division.
c.Compute the return on investment for each division.
d.Which division manager is doing best? Why?
e.What other factors should be included when evaluating the managers?
For parts (b)and (c)income is defined as operating income.

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