Suppose a Company Evaluates Divisional Performance Using Both ROI and Residual

question 102

True/False

Suppose a company evaluates divisional performance using both ROI and residual income. The company's minimum required rate of return for the purposes of residual income calculations is 12%. If a division has a residual income of $6,000, then its ROI is greater than 12%.

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Definitions:

Multiperson Comparisons

A process where the performance, abilities, or needs of multiple individuals are evaluated against each other.

Performance Appraisal

refers to the process of evaluating employee performance against predefined benchmarks or objectives, often influencing promotions, pay raises, and development.

Work Accomplishments

Achievements or contributions made by an individual or a team in their job or professional career.

Providing Feedback

The process of giving constructive information or evaluations to individuals or groups regarding their behavior or performance, aimed at improving future outcomes.