Since Residual Income (RI) Is Not a Percentage, It Is

question 96

Multiple Choice

Since residual income (RI) is not a percentage, it is not very useful for:

• A) Comparing business units of significantly different size.
• B) Evaluating the performance of subunits with high ROIs.
• C) Motivating goal-congruent behavior on the part of divisional managers.
• D) Evaluating the short-term financial performance of small divisions.
• E) Evaluating the short-term financial performance of larger divisions.

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