The study of reveals a number of ways to enhance your relationship strategy and add value. this the salesperson perform his or her work with poise and confidence.

The answer to the blank space is etiquette and manners.

When a salesperson receives training to enhance their etiquette and manners, it would help with their self-confidence when meeting potential clients or customers. It would also help them in establishing a good relationship with these individuals, since people are more receptive to people with good manners.

Solomons Company

North and South Divisions

North/South Divisions:

Operating Profit = $6,000,000/$40,000,000

Investment = $30,000,000/$320,000,000

Cost of Capital (WACC) = 8%

a-1) ROI for both North and South Divisions:

ROI = Return on Investment

= Operating Profit/Investment x 100

North's ROI = 6/30 x 100 = 20%

South's ROI = 40/320 x 100 = 12%

a-2) If Solomons measures performance using ROI, the North division had the better performance.

b-1) Calculation of EVA for both North and South divisions:

EVA = Economic Value Added.

EVA = Net Operating Profit After Taxes minus (Invested Capital x WACC)

North's EVA = $6,000,000 - ($30,000,000 x 8%) =6m - 2.4m = $3,600,000

South's EVA = $40,000,000 - ($320,000,000 x 8%) = 40m - 25.6m = $14,400,000

b-2) If Solomons measures performance using economic value added, the South division had the better performance.

c) 1. When ROI is evaluated using 16% cost of capital, the North division had a better performance.  So the evaluation changes based on the 16% cost of capital.  Whereas, North makes 20% ROI as against 16% cost of capital, the South manages 12% ROI as against 16% cost of capital.

c) 2. When performances are evaluated by EVA with 16% cost of capital:

North's EVA = $6,000,000 - ($30,000,000 x 16%) = 6m - 4.8m = $1,200,000

South's EVA = $40,000,000 - ($320,000,000 x 16%) = $40m - $51.2m = ($11,200,000)

When evaluated by EVA using 16% cost of capital, my evaluation would favour the North instead of the South.

Explanation:

ROI or Return on Investment is a financial performance measure which measures the profitability of an investment in a simple way.  It compares the return on an investment relative to its cost.  It is expressed as a percentage.

EVA or Economic Value Added is also a financial performance measure which subtracts the cost of capital from the operating profit in order to gauge in dollars terms the value created by the firm.