Which of the Following Measures of Performance Encourages Continued Expansion

question 27

Multiple Choice

Which of the following measures of performance encourages continued expansion by an investment center so long as it is able to earn a return in excess of the minimum required return on average operating assets?

• A) return on investment
• B) transfer pricing
• C) the contribution approach
• D) residual income

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Definitions:

Moral Development

The process through which individuals acquire and understand moral concepts, including how to differentiate right from wrong and develop ethical principles over time.

Morality of Reducing Injustice

Ethical considerations involved in actions and policies aimed at decreasing unfairness and inequality in society.

Morality of Associations

The ethical considerations involved in one's affiliations or connections with groups or individuals.

Difference Principle

A concept in political philosophy that suggests social and economic inequalities should be arranged so that they are to the greatest benefit of the least advantaged members of society.