Enager Industries

University of Waterloo Enager Industries, Inc. Akua Acheampong, Lori Chin Suey, Kieng Iv, Tara Mathanda, Hubert Sy Issues Summary Enager Industries (Enager) is a relatively young lodge that has three divisions Consumer Products, Industrial Products, and Professional Services. Currently, the divisions are classified as investment centres measured using lapse on assets (ROA). The refreshing set as a whole has not been open to wager ROA targets despite outgrowths in earnings per share and save on equity over the past year. Two of the divisions in specific have not been able to achieve the company-wide return on asset target of 12%. The purpose of this composition is to survey the current performance criterion system and how it has been implemented. In addition, in that respect is tension between divisional managers collectable to the performance measurement system. Recommendations have been provided relating to the ROA targets, evaluation of proposed find outs, and the design of the balanced scorecard to tax divisions. New Product final cause Sarah McNeil, product development manager in the Consumer Products Division of Enager, deep proposed a overbold project that was rejected by total heat Hubbard, Chief Financial Officer. regular(a) though the project had an estimated $0.

15 increase on Earnings per parcel (EPS), it was rejected because it did not specify a return on assets of 15%, which is the current hurdle measure. The project is estimated to have $390,000 in earnings before elicit and taxes (EBIT) with an incremental asset infrastructure of $3,000,000. This computes to a return on asset (ROA) of 13%, which is lower berth! than Henrys necessitate return for any sore projects. Sarahs new project should not have been rejected, as the gross indispensable rate of return of the company is 12%. This takes into account the marginal cost of debt, which is fairly high because of Enagers recent debt finance interest rates, and the marginal cost of equity, 1 shareholders required rate of return. If a project has a...If you want to get a secure essay, order it on our website: BestEssayCheap.com

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