Return on Investment (ROI), Residual Income (RI), and Economic Value

question 141

Multiple Choice

Return on investment (ROI) , residual income (RI) , and Economic Value Added (EVA®) all have in common which one of the following characteristics?

• A) They all lead to goal-congruency problems when used to evaluate subunit performance.
• B) They all incorporate nonfinancial performance measures into the metric.
• C) They all rely on the use of data used in the preparation of financial statements (for external reporting).
• D) They are all relative (rather than absolute) performance indicators.
• E) They all incorporate in the financial performance metric some measure of investment.