Unlike ROI,residual Income Does NOT Encourage a Short-Run Orientation

question 66

True/False

Unlike ROI,residual income does NOT encourage a short-run orientation.

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Definitions:

Cash

Liquid currency and assets readily convertible to currency, used by businesses to conduct transactions.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the owners' claim on the business assets.

Withdrawals

Funds taken out from a business by its owner(s) for personal use, which reduce the capital accounts in the company’s equity section.

Revenue

The global earnings a company obtains from its key operational trades, especially in goods or services sales.