The Basic Objective of the Residual Income (RI) Approach to Divisional

question 57

Multiple Choice

The basic objective of the residual income (RI) approach to divisional performance measurement and evaluation is to have a division maximize its:

• A) Return on investment (ROI) rate.
• B) Imputed interest rate charge.
• C) Cash flows, after taxes.
• D) Cash flows in excess of a desired minimum amount.
• E) Operating income in excess of an imputed charge for capital invested in the division.

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Definitions:

Civil Rights

Legal protections and guarantees for individuals against discrimination and infringement of their liberties and rights by others, including the government.

Federal Level

Pertaining to the national government of a country, as opposed to state or local levels.

Korean War

A struggle that occurred from 1950 to 1953, involving North Korea, backed by China and the Soviet Union, versus South Korea, which had the support of the United Nations, mainly the United States.