When Residual Income Is Used to Evaluate Division Managers,the Goal

question 53

True/False

When residual income is used to evaluate division managers,the goal for each division manager is to increase residual income over time.

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Definitions:

Ratio

A mathematical relationship between two numbers indicating how many times the first number contains the second.

Interval

A range of values between two points, often used in reference to scales in measurements.

True Zero Point

In measurement scales, a true zero point indicates the absence of the quantity being measured, allowing for ratios to be meaningfully calculated.

Interval Level Variables

Interval level variables are a type of quantitative data where the intervals between values are meaningful, but the data lack a true zero point, allowing for the measurement of difference but not ratio.