Got a tricky question? Receive an answer from students like you! Try us!

Minnetonka corporation - Essay Example

Free
College
Essay
Finance & Accounting
Pages 2 (502 words)
Download 0

Summary

Balanced scorecard is a concept for measuring a company's activities in terms of its vision and strategies,to give managers a comprehensive view of the performance of a business.The maximum purchase price that should be acceptable should be less than or equal to the difference that Minnetonka is saving for not making the products themselves …

Extract of sample
Minnetonka corporation

Balanced scorecard is a concept for measuring a company's activities in terms of its vision and strategies, to give managers a comprehensive view of the performance of a business. The maximum purchase price that should be acceptable should be less than or equal to the difference that Minnetonka is saving for not making the products themselves. Any price of the bindings that takes the total cost above $ 900,000 should be unacceptable; since in that case, the company is better off making the product itself than to go for the purchase option. Hence, the maximum that the company can be willing to pay to purchase 10,000 pairs of bindings is $ 110,000. This means that the maximum purchase price per pair of bindings will be 110,000 / 10,000 = $11 per pair of bindings = $ 5.5 per binding. Since the company has invested capital in the business, that capital can not be used to achieve other gains that the company could have achieved had it not invested the capital in the business. The return that the business is generating on that capita is net operating profit after tax, while the return that could have been generated if the capital was not invested in the business is the second part of above equation. The difference will tell us whether the company is actually getting an economic value from the capital or not. ...
Download paper
Not exactly what you need?

Related Essays

ExxonMobil Corporation
The modern history of the US oil and gas industry began in the latter half of the 19th century with the first commercial oil drilling venture in Pennsylvania. The period 1955 - 2002 saw an important era in the US oil and gas industry. In spite of large scale production, the US saw itself drawing down its reserves of both oil and gas during this period. The US increased its reliance on foreign oil during the 1950s and 1960s. In 1960, the Organization of Petroleum Exporting Countries (OPEC) was formed. Various political and economic events, in particular the wars in the Middle East during the…
16 pages (4016 words)
Managerial Accounting and Organizational Controls Essay
At $10.5 per pair the cost, the company will purchase the 10,000 bindings with $105,000. Adding this, we get $110,000 allocation for the bindings for the supplier so that making and outsourcing are the same. Dividing this by the annual number of pairs will yield $11 which is the ceiling price that Minnetonka can be charged for ski-bindings.…
4 pages (1004 words)
FMC Corporation
While Aberdeen has the mindset of a modern, intelligent organization seeking to enhance continuous learning opportunities for its employees so that they too grow flexibly with the ever-changing needs of the market, Green River persists in a strictly role-based model offering little room for career enhancement, and instead, plenty of room for employee discontent.…
6 pages (1506 words)
Nucor Corporation
Generically, a value strategy is the pattern of decisions and actions that constitute the firm's overall approach toward providing realizable net value to customers. A value strategy inherently involves all parts of a firm's functional and organizational strategies that provide value realized by customers or require sacrifices by customers (see Appendix Table 1)…
8 pages (2008 words)