Sm Ch 25

CHAPTER 25
REWARDING BUSINESS PERFORMANCE
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL
THINKING CASES
Brief
Exercises
B. Ex. 25.1
B. Ex. 25.2
B. Ex. 25.3
B. Ex. 25.4
B. Ex. 25.5
B. Ex. 25.6
B. Ex. 25.7
B. Ex. 25.8
B. Ex. 25.9
B. Ex. 25.10

Topic
Motivating employee performance
Evaluate business performance using ROI
Comparing ROI and residual income
Balanced scorecard perspectives
Computations for the DuPont model
Criticisms of ROI
Calculate residual income
Calculate EVA
Variable vs. fixed compensation
Components of ROI

Learning
Objectives
25-1, 25-6
25-2, 25-3
25-2, 25-4
25-5
25-3
25-3
25-2, 25-4
25-4
25-6
25-2

Exercises
25.1
25.2
25.3
25.4
25.5

Topic
Accounting terminology
Balanced scorecard activities
Employee motivation
ROI versus EVA measures
Performance and ROI versus residual income

Learning
Objectives
25-2–25-6
25-1, 25-5
25-1
25-2–25-4
25-2–25-4

25.6

Concerns about ROI

25-2, 25-3

25.7

Compensation choices

25-1, 25-5,
25-6

25.8
25.9
25.10
25.11

Designing compensation schemes
Balanced scorecard matching
City Wide Door ROI and residual income
Using ROI and EVA for performance evaluation

25-6
25-5
25-2, 25-4
25-2–25-4

Analysis, judgment, communication Analysis, communication, judgment
Analysis, judgment
Analysis
Analysis, judgment
Analysis, judgment

25.12
25.13

Finding unknowns
Real World: Home Depot Balanced Scorecard

25-2, 25-4
25-5

Analysis
Analysis

25.14
25.15

Comparing division performance
Real World: Home Depot’s ROI and EVA

25-4, 25-5
25-4, 25-6

Analysis, judgment
Analysis,
communication, judgment, research

Skills
Analysis, judgment
Analysis
Analysis, judgment
Analysis, judgment
Analysis
Analysis
Analysis
Analysis
Analysis, judgment
Analysis, communication

Skills
Analysis
Analysis, judgment
Analysis, judgment
Analysis
Analysis, judgment

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Problems
Sets A, B