Using Residual Income as a Measure of Performance Rather Than

question 62

Multiple Choice

Using residual income as a measure of performance rather than return on investment promotes goal congruence because residual income ________.

• A) places importance on the reduction of underperforming assets
• B) calculates a percentage return rather than an absolute return
• C) concentrates on maximizing an absolute amount of dollars
• D) concentrates on maximizing the return on sales

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Definitions:

Bureau of Reclamation

is an agency within the U.S. Department of the Interior, responsible for the oversight and management of water resources, including the construction of dams, power plants, and canals for irrigation, water supply, and electricity generation.

Comstock Lode

A major discovery of silver ore in Nevada in 1859 that led to a mining boom, significantly influencing the economy of the United States.

Western Settlement

The expansion and establishment of communities in the western part of the United States during the 19th century, often facilitated by the government.

Theodore Roosevelt

The 26th President of the United States (1901–1909), known for his progressive policies, conservation efforts, and the Panama Canal construction.