Which of the Following Items Would Most Likely Not Be

question 138

Multiple Choice

Which of the following items would most likely not be incorporated into the calculation of a division's investment base when using the residual income (RI) or the return on investment (ROI) approach for performance measurement and evaluation?

• A) Fixed assets used in divisional operations.
• B) Land being held by the division as a site for a new plant in the future.
• C) Division inventories when division management exercises control over the inventory levels.
• D) Division accounts payable when division management exercises control over the amount of short-term credit utilized.
• E) Division accounts receivable with division management exercises control over credit policy and credit terms.

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Definitions:

Customizes Products

The act of modifying products to meet the preferences or requirements of different customers.

Downsizing

Decreasing the size of operations.

Market Scope

The extent or range of a market, including the potential audience or customer base that a business can target.

Competitive Advantage

The unique attributes or capabilities that allow an organization to outperform its competitors.