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  • This topic has 5 replies, 2 voices, and was last updated 1 year ago by LMR1006.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
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  • February 16, 2024 at 3:34 am #700462
    Anonymous
    Inactive
    • Topics: 53
    • Replies: 46
    • ☆☆

    If a manager’s performance is being evaluated, a portion of head office assets should be included in the calculation of ROI in Alder Co’s investment centres.
    FALSE

    If the performance of the investment centre is being appraised, head office assets or investment centre assets controlled by head office should not be included in the calculation of ROI.

    FALSE

    Please explain

    February 16, 2024 at 8:11 am #700475
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1505
    • ☆☆☆☆☆

    When evaluating a manager’s performance, only the assets and profits that the manager has control over should be included in the calculation of ROI.

    Head office assets, which are not controlled by the manager, should not be included in this calculation.

    When appraising the performance of an investment centre, head office assets or investment centre assets controlled by head office should not be included in the calculation of ROI because the manager of the investment centre does not have control over these assets. The principle of controllability is key in performance evaluation, as managers should only be assessed based on elements they can influence. Including assets over which they have no control would distort the ROI calculation and not accurately reflect the manager’s performance in the assets they can manage.

    This ensures that the ROI reflects the efficiency and profitability of the investment centre with respect to the assets and operations the manager can actually control.

    February 16, 2024 at 9:02 am #700488
    Anonymous
    Inactive
    • Topics: 53
    • Replies: 46
    • ☆☆

    second one is true?

    February 16, 2024 at 10:05 am #700493
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1505
    • ☆☆☆☆☆

    No……

    For an investment centre, the manager is responsible for both profit and capital investment decisions. Therefore, the ROI should reflect the profitability and efficiency of the assets they control. Including head office assets or investment centre assets controlled by head office in the ROI calculation would distort this measure, as these assets are not directly controlled by the investment centre’s manager.

    The principle of controllability is key here; managers should only be evaluated on elements they can influence. Including uncontrollable factors, such as head office assets, would not be a fair assessment of their performance.

    February 16, 2024 at 10:15 am #700494
    Anonymous
    Inactive
    • Topics: 53
    • Replies: 46
    • ☆☆

    If the performance of the investment centre is being appraised, head office assets or investment centre assets controlled by head office should not be included in the calculation of ROI.

    should not be included? so this is true?

    sorry i didnt understand

    February 16, 2024 at 10:48 am #700497
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1505
    • ☆☆☆☆☆

    Try again

    It is important to recognise that while managers should be appraised based on controllable factors, the investment centre’s performance is also dependent on head office assets, which provide necessary support and resources.

    Therefore, excluding these assets would not accurately reflect the investment centre’s true return on investment.

    If you don’t get it now I suggest you leave it
    There are some things you have to accept as a student you won’t understand or get the logic …. That is okay honestly it is
    You can’t know everything.

    Please try and work through questions a bit more
    Watch our free lectures on areas that you are struggling with.

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