Which Performance Measure Uses After-Tax Operating Income and the Actual

question 40

Multiple Choice

Which performance measure uses after-tax operating income and the actual cost of capital employed?

• A) margin
• B) residual income
• C) return on investment (ROI)
• D) economic value added (EVA)

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Definitions:

Output Market

The marketplace in which goods and services produced by businesses are sold or offered to end users or consumers.

U.S.GAAP

United States Generally Accepted Accounting Principles, a standard framework of accounting rules for financial reporting.

Long-lived Asset

An asset with a useful life longer than one year, typically including property, plant, and equipment, used in the operation of a company.

GAAP

The standard set of guidelines for financial accounting known as Generally Accepted Accounting Principles, used primarily within the United States and other jurisdictions.