The Major Advantage of Residual Income as a Performance Measure

question 76

True/False

The major advantage of residual income as a performance measure is that it gives consideration to not only a minimum rate of return on investment but also to the total magnitude of operating income earned by each division.

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Definitions:

History Exam

A test or assessment focused on historical facts, events, figures, and concepts to evaluate understanding or knowledge.

Serial-Position Effect

A psychological phenomenon where an individual recalls the first and last items in a series best, and the middle items worst.

Items at the Beginning

Refers to the phenomenon where items that appear early in a list are more likely to be remembered than items in the middle.

Items at the End

Refers to objects, questions, or elements placed at the final part of a sequence or list.