Managerial Performance Can Be Measured in Many Different Ways Including

question 76

Multiple Choice

Managerial performance can be measured in many different ways including return on investment (ROI) and residual income. A good reason for using residual income instead of ROI is:

• A)Residual income can be computed without having to measure operating assets.
• B)Managers are more likely to accept projects that are beneficial to the company.
• C)ROI does not take into account both turnover and margin.
• D)A minimum rate of return does not have to be specified when the residual income approach is used.

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Definitions:

Statute of Frauds

A legal principle that requires certain types of contracts (e.g., real estate transactions, contracts not to be performed within a year) to be in writing and signed by the parties to be enforceable.

Credit

A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date, generally with interest.

Receipt

A written acknowledgment that something of value has been transferred from one party to another.

Statute of Frauds

A rule of law that mandates specific contract types to be documented in writing and signed by the accountable party for them to be valid and enforceable.