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 connectedness that has three divisions Consumer Products, Industrial Products, and Professional Services. Currently, the divisions are classified as investment centres measured using have on assets (ROA). The cap subject set as a whole has not been able to wager ROA targets despite step-ups in earnings per share and father 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 makeup is to survey the current performance criterion system and how it has been implemented. In addition, in that respect is tension between divisional managers delinquent to the performance measurement system. Recommendations have been provided relating to the ROA targets, evaluation of proposed find outs , and the intention of the balanced scorecard to tax divisions. New Product intention Sarah McNeil, product development manager in the Consumer Products Division of Enager, tardily proposed a overbold project that was rejected by heat content 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 place a return on assets of 15%, which is the current vault vagabond. The project is estimated to have $390,000 in earnings before use up 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 t han Henrys necessitate return for any refr! eshing projects. Sarahs new project should not have been rejected, as the gross unavoidable rate of return of the company is 12%. This takes into account the peripheral cost of debt, which is fairly high because of Enagers recent debt financial backing 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 safe essay, order it on our website: OrderEssay.net

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