Residual income is better measure for performance evaluation of an investments center manager than return on investments because The problems associated with measuring the assets base are eliminated Desirable investments decisions will not be neglected by high-return divisions The arguments about the implicit cost of interest are eliminated Only gross book value of assets needs to be calculated

Residual income is better measure for performance evaluation of an investments center manager than return on investments because The problems associated with measuring the assets base are eliminated Desirable investments decisions will not be neglected by high-return divisions The arguments about the implicit cost of interest are eliminated Only gross book value of assets needs to be calculated

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 12E

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Similar questions

The following is a disadvantage of ARR investment appraisal method (select one): A. multiple or no solutions B. does not take into account time value of money C. easy to explain D. management performance is rarely evaluated based on ARR
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