Residual Income Is Superior to Return on Investment as a Means

question 51

True/False

Residual income is superior to return on investment as a means of measuring performance because it encourages managers to make investment decisions that are more consistent with the interests of the company as a whole.

Recognize the cost structures associated with service delivery, including inventory carrying costs.

Understand how services can be classified by various criteria including the level of tangible vs. intangible attributes, and the sector (public, private, nonprofit).

Understand the different debt instruments used by public corporations to finance their activities.

Recognize the legal implications of security interests and priority among creditors.