Residual Income Should Be Used to Evaluate an Investment Center

question 203

True/False

Residual income should be used to evaluate an investment center rather than a cost or profit center.

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Definitions:

Potential Energy

The energy stored in an object or system due to its position, condition, or composition.

Kinetic Energy

The energy that an object possesses due to its motion, dependent on mass and velocity.

Efficient

Performing or functioning in the best possible manner with the least waste of time and effort.

Catalyst

Substance that increases the rate at which a chemical reaction proceeds without being changed permanently.