A Problem with Ratio-Based Measures Is That Managers Can Make

question 114

True/False

A problem with ratio-based measures is that managers can make decisions that improve divisional income but lower total organizational income.

---

Definitions:

Poisson Process

A statistical process that models the occurrence of events within a fixed interval of time or space, assuming that these events happen with a known constant mean rate and independently of the time since the last event.

Continuous Random Variable

A variable that can take on an infinite number of values within a given range, representing measurements.

Binomial Distribution

An analytical distribution showing the probability of a variable assuming either of two separate states within a specified number of observations.

Poisson Distribution

A statistical distribution illustrating the likelihood of a specific count of occurrences within a definite time or space span, provided that these occurrences happen at a consistent, known rate and are independent of the duration since the preceding occurrence.