If Performance Measures Are Perfect Proxies for Organizational Goals

question 78

Multiple Choice

If performance measures are perfect proxies for organizational goals,

• A)sub-optimization will be enhanced.
• B)sub-unit managers will strive to achieve organizational goals.
• C)sub-units can all be decentralized.
• D)residual income will rise.

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Definitions:

Face Value

The nominal value or dollar value of a security stated by the issuer.

Quoted

Mentioned or referred to as evidence for justification of an action, decision, or system.

Nominal Discount Rate

The discount rate before adjusting for inflation, reflecting the interest rate that a bank or lender specifies.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.