Indicate Whether Each of the Following Statements Is True or False

question 125

Short Answer

Indicate whether each of the following statements is true or false.
Return on investment often is used to evaluate cost centers within a company.______
Return on investment measures a manager's ability to maximize earnings above a target level.______
To calculate residual income,a company must first set a target or desired return on investment.______
Residual income is stated as a dollar amount.______
Suboptimization occurs when a departmental or division manager seeks to maximize benefit for the company as a whole at the expense of his or her own best interest.______

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Definitions:

Plant Capacity

The maximum production output that a manufacturing facility can achieve under normal conditions.

Television Sets

Electronic devices designed to receive and display television broadcast signals and other multimedia content.

Demand Constraint

A limit placed on the quantity of a product that can be produced or sold, often due to resource limitations.

Distribution Center

A warehouse or storage facility where goods are stored for further distribution to retailers or customers.