Brookings Company Evaluates Its Managers on the Basis of Return

question 136

Multiple Choice

Brookings Company evaluates its managers on the basis of return on investment.Division Three has a return on investment (ROI) of 15%,while the company as a whole has an ROI of only 10%.Which of the following performance measures will motivate the manager of Division Three to accept a project earning a 12% return?

• A) ROI.
• B) Residual income.
• C) Both ROI and residual income will motivate the manager to accept the project.
• D) Neither ROI nor residual income will motivate the manager to accept the project.

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Definitions:

Psychoanalytic Theory

A theory of personality organization and the dynamics of personality development that guides psychoanalysis, a clinical method for treating psychopathology.

Unconscious Wishes

Desires or thoughts that reside in the unconscious mind, influencing behavior without one's awareness.

Nicotine

A stimulant and addictive substance found in tobacco, responsible for the dependency-forming properties of tobacco smoking.

Stimulant

A stimulant is a substance that raises levels of physiological or nervous activity in the body.