Indicate Whether Each of the Following Statements Is True or False

question 64

Short Answer

Indicate whether each of the following statements is true or false.
Use of residual income to evaluate managers of an investment center may avoid some of the suboptimization that can occur with use of return on investment as a performance measure.______
Residual income is stated as a ratio or percentage.______
One disadvantage with residual income as a measure of performance is that it causes smaller divisions to appear to do better than larger divisions.______
A balanced score card includes various nonfinancial performance measures as well as financial performance measures.______
The balanced scorecard is a holistic approach to evaluating management and division performance.______

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Definitions:

Personal Consumption Expenditures

Refers to the value of goods and services purchased by households for the purpose of consumption.

Gross Private Domestic Investment

The total amount of money spent on investment in physical assets (such as buildings and machinery) by the private sector.

Government Spending

The total amount of money that the government expends on goods, services, and public projects to provide for citizens or stimulate the economy.

Aggregate Spending

The total spending in an economy on domestic goods and services, including consumption, investment, government expenditures, and net exports.