Managers Who Are Evaluated Favorably When Profit Is Used as the Performance

question 103

True/False

Managers who are evaluated favorably when profit is used as the performance measure will most likely be evaluated favorably when return on investment is used as the performance measure.

---

Definitions:

GAAP

Generally Accepted Accounting Principles; a collection of commonly followed accounting rules and standards for financial reporting in the United States.

FASB

The Financial Accounting Standards Board, which is responsible for establishing and improving standards of financial accounting and reporting for the private sector in the United States.

Higher Risk Securities

Investment products that offer potentially higher returns but come with an increased level of risk, including stocks or bonds from less stable companies.

Foreign Exchanges

The global market in which currencies are traded. This market determines the foreign exchange rates for every currency.