Most Organizations Use Residual Income Instead of Return on Investment

question 122

True/False

Most organizations use residual income instead of return on investment (ROI) as a performance measure.

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Definitions:

Quality Cost Report

A financial report detailing the costs associated with ensuring products meet quality standards, including prevention, appraisal, and failure costs.

Rework Labor

The effort and cost associated with correcting defective goods or services after they have been produced.

External Failure Cost

Costs incurred when a product or service fails to meet quality standards after being delivered to the customer, including returns, repairs, and warranty claims.

Quality Cost Report

A document that details the costs associated with preventing, detecting, and correcting defective work in a company.