One Advantage of Using After-Tax Income as a Performance Measure

question 48

True/False

One advantage of using after-tax income as a performance measure of divisional results is that it is a financial accounting measure that can also be used to compute organizational income.

---

Definitions:

Agency Relationship

A legal arrangement in which one party, the agent, is authorized to act for another, the principal, in business transactions.

Principal

In finance, the original sum of money borrowed or invested, excluding any interest or profit. In legal contracts, the party who authorizes an agent to act on their behalf.

Course And Scope

Refers to activities that are conducted within the bounds of an employee's job duties and during employment.

Employer Authorization

A formal approval or permission granted by an employer, often related to employment activities or access to company resources.