The Major Advantage of Residual Income as a Performance Measure

question 199

True/False

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

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Definitions:

Whiplash

A neck injury due to forceful, rapid back-and-forth movement of the neck, like the cracking of a whip, often occurring during rear-end car accidents.

Hyperextension

An excessive extension of a limb or joint beyond its normal range of motion, potentially causing injury.

Intervertebral Disk

A fibrocartilaginous cushion serving as a shock absorber between adjacent vertebrae in the spinal column.

Fibrocartilage

A type of tough, dense tissue that has both fibrous and cartilaginous qualities, commonly found in intervertebral discs and joint capsules.