When the Manager's Evaluation Is Based on Residual Income, the Manager

question 37

Multiple Choice

When the manager's evaluation is based on residual income, the manager should accept a project if the residual income is:

• A) positive.
• B) negative.
• C) equal to the ROI.
• D) greater than net income.

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Definitions:

Surplus

Surplus refers to the situation where the quantity of a product or service supplied in a market exceeds the quantity demanded at the current price.

Compensating Differentials

Wage differentials that compensate workers for the job attributes, such as difficulty or undesirable conditions.

Salary

Regular payment from an employer to an employee, typically expressed on an annual basis but paid monthly or biweekly.

Educational Background

The formal training and education an individual has received, including degrees, certifications, and school attendance.