Which of the Following Is Not True About Residual Income

question 29

Multiple Choice

Which of the following is not true about residual income (RI) ?

• A)Influenced by size.
• B)Managers maximize an absolute amount.
• C)Managers maximize percentages.
• D)Stakeholders want residual income to achieve goal congruence.
• E)Managers evaluated on residual income choose new project only if residual income is positive.

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Definitions:

Association

The relationship or correlation between two or more variables or factors in a study.

Chi-Square Test

A statistical method used to assess the differences between categorical variables in a contingency table.

Distribution

Describes the way values of a variable or data points are spread or dispersed across a range.

Degree Of Freedom

The number of independent pieces of information available to estimate another piece of information, often in statistical analysis.