Using Residual Income as a Measure of Performance Rather Than

question 62

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) calculates a percentage return rather than an absolute return
• C) concentrates on maximizing an absolute amount of dollars
• D) concentrates on maximizing the return on sales

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Definitions:

Endocrine Glands

Glands of the endocrine system that secrete hormones directly into the bloodstream, rather than through ducts.

Hormones

Chemical messengers produced by the endocrine glands that are transported by the bloodstream to target organs to regulate physiology and behavior.

Diaphragm Muscle

The diaphragm muscle is a large, dome-shaped muscle located at the base of the lungs, playing a crucial role in the breathing process by contracting and relaxing to change the volume of the chest cavity.

Thoracic

Pertaining to the chest area, located between the neck and the abdomen.