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

question 13

Multiple Choice

The basic objective of the residual income (RI) approach to performance measurement of a business unit considered an investment center is to have the investment center maximize its:

• A) Return on investment.
• B) Imputed interest rate charge.
• C) Cash flows.
• D) Cash flows in excess of a desired minimum amount.
• E) Operating income in excess of a desired minimum dollar return.

Recognize the legal and ethical considerations in recruitment and selection processes.

Understand the role of organizational development techniques in improving communication and decision-making.

Describe the impact of recruiting on organizational culture and employee integration.

Understand the criteria used for basic selection decisions in organizations.

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Definitions:

Owner's Equity

The residual interest in the assets of a business after deducting its liabilities, essentially the owner's claim on the company's assets.

Receiving A Bill

The process of receiving an invoice from a supplier indicating the amount due for goods or services received.

Account Receivable

Money owed to a company by its customers for goods or services provided on credit.

Sale On Account

A transaction where goods are sold and payment is to be made at a later date.