I.

BACKGROUND
PROBLEM
Do each segment create value or the !rm"
OB#EC$I%E&'
() Calculate $elecommun*cat*on &erv*ces+ ,ACC
-) Calculate Pro.uct / &0stems+ ,ACC
1) Determ*ne the Econom*c Pro!t or each segment
II. CALCULA$ION ,ACC
2s*nce each segment has .*3erent r*s4 e56osure than the 7*rm 8 *t *s
necessar0 to .eterm*ne the mult* .*v*s*onal cost o ca6*tal or each
segment+s ,ACC to 9e use. *n evaluat*ng *ts 6erormance )
III. CALCULA$ION ECONOMIC PRO7I$
I%. RECCOMMENDA$ION
Base. on the Econom*c Pro!t com6utat*on ma.e or each segment8 %*ctor
:ossar*an+s assessment on Pro.uct / s0stem *s r*ght8 9ecause *t .oes not
create value 2no a.e;uate returns through earn*ngs) or the !rm s*nce *ts
Econom*c 6ro!t *s negat*ve 2<=.=>).
,*th th*s8 $eletech ma0 sell the segment as :ossar*an+s recommen.at*on
or ocus on the segment to *m6rove *ts o6erat*ons.