Which One of the Following Is Not a Limitation Shared

question 5

Multiple Choice

Which one of the following is not a limitation shared by residual income (RI) and return on investment (ROI) ?

• A)They are both short-term performance indicators.
• B)They both may fail to capture significant value-creating activities of the organization.
• C)They are both subject to short-term manipulation on the part of managers.
• D)Both are subject to a number of measurement issues that complicate their use in practice.
• E)They both relate earnings to the level of investment.

---

Definitions:

Value Judgments

Assessments or opinions based on personal values, ethics, or standards, rather than objective data.

Budget Line

A graphical representation showing all possible combinations of two goods that can be purchased with a given budget at fixed prices.

Money Income

The total amount of monetary earnings received by an individual or household over a specific time period.

Purposeful Behavior

Actions taken with a specific goal in mind, driven by intentions and often linked to rational decision-making.