Using Residual Income as a Measure of Performance Rather Than

question 38

Multiple Choice

Using residual income as a measure of performance rather than return on investment promotes goal congruence because residual income:

• A)places importance on the reduction of underperforming assets.
• B)concentrates on maximising an absolute amount of dollars.
• C)calculates a percentage return rather than an absolute return.
• D)concentrates on maximising the return on sales.

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Definitions:

Injunction

A court order that either prohibits a party from doing a specific act (restraining order) or orders a party to carry out a specific act (mandatory order), typically to prevent harm or to preserve the status quo during litigation.

Civil Lawsuit

A legal action taken by one party against another for the purpose of resolving a dispute or claiming damages.

Deceptive Advertising

The practice of advertising with claims that mislead or could mislead a reasonable consumer.

Industry Guides

Publications or documents issued by regulatory bodies that provide compliance guidelines for specific industries.