A Company May Prefer to Use Residual Income Over Return

question 94

Multiple Choice

A company may prefer to use residual income over return on investment for performance evaluation because:

• A)return on investment is absolute figure but residual income is a ratio.
• B)residual income is more likely to lead to goal congruence than return on investment.
• C)it is easier to calculate residual income than return on investment.
• D)residual income considers three elements but return on investment considers only two elements.

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Definitions:

Highly Active

Reflects a lifestyle or level of activity that significantly exceeds the average, often involving rigorous and frequent physical exercise.

Average Steps

The typical number of steps a person takes in a day, used as a basic metric for physical activity levels.

Low Active

Describes a lifestyle or individual with minimal levels of physical activity, slightly above being sedentary.

Skill-related Fitness

Components of physical fitness that contribute to the ability to perform well in sports and activities requiring specific skills, such as agility, balance, coordination, power, reaction time, and speed.