When Assessing Performance,one Way to Compensate for Differences Among Divisions

question 62

Multiple Choice

When assessing performance,one way to compensate for differences among divisions of a multinational organization would be for the parent company to

• A)use different target rates of return to compute residual incomes.
• B)modify the return on investment calculation so that foreign currency fluctuations are removed from all financial statement figures.
• C)classify all domestic divisions as investment centers and all foreign divisions as profit centers.
• D)use financial performance measures for units whose records are kept in the domestic currency and non-financial measures for units whose records are kept in a foreign currency.

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