In what way can the use of ROI for investment centers lead to bad decisions? How does

Question:

In what way can the use of ROI for investment centers lead to bad decisions? How does the residual income approach overcome this problem?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Managerial Accounting

ISBN: 978-1259024900

9th canadian edition

Authors: Ray Garrison, Theresa Libby, Alan Webb

See More Books

Question Posted: Jul 08, 2015 06:16 PM

See More Questions

In what way can a company take a bath when recording the acquisition of another company?
What is a dissociative reference group? In what way can dissociative reference groups influence consumer behavior?
In what way can a business strategy motivate and inspire employees?
Write a filter that reads text from an input stream and prints it to an output stream, removing any lines that consist only of whitespace.
What is the relationship between importing and exporting for an individual company?
Preparing a Postclosing Trial Balance. LO 6-2 Based on the following account balances and the account balances after the closing entries, prepare a postclosing trial balance for the De La Rosa...
Consider the regression models described in Example 8.4. Example 8.4 a. Graph the response function associated with Eq. (8.10). Equation (8.10) b. Graph the response function associated with Eq....
Rojas Company had these transactions pertaining to stock investments: Feb. 1 Purchased 1,200 shares of MJ common stock (2% of outstanding shares) for $8,000 cash plus brokerage fees of $400. July 1...
What did they do to accelerate analysis and results in general electric case?
Do you think shareholder activists would have been as upset with Nardelli's severance package had Home Depot's stock performed much better under his leadership?
Mason Paper Company (MPC) manufactures large quantities of standard white 8 11 inch paper for use in computer printers and photocopiers. MPC has reported operating losses for the last two years due...
Should residual income be used to compare divisions of different sizes? Why or why not?
The price of Mabels car, not including interest, is 12 percent more than the price of Roses car. Combined, Mabel and Roses cars cost $53,000. If Mabels car loan interest rate was 5.20 percent, what...
What Are Your Arguments? Why Should We Care Construct at least 4 different claims (four different "I Says") supporting your working thesis statement, which could in turn be supported by evidence from...
1. Is the economy now at full employment, or is it experiencing cyclical unemployment? 2. Should the Fed try to lower the unemployment rate to zero? 3. Has inflation been stable, rising, or falling?...
Develop a business case for a project Attached Files: File business_case.docx business_case.docx - Alternative Formats (12.033 KB) File Business Case Business Case - Alternative Formats (15.863 KB)...
What is the Shareholder's equity amount and how do I find it here Inventory Total assets Current ratio Acid-test ratio $ 320,000 $ 865,000 3.20 1.60 1.50 Debt to equity ratio Required: Compute the...
a) Investigate what a monopoly is and a current example of a representative company in this market. Justify your choice. Look for an article, consult reliable sources on the internet, no more than...
State the factors to be taken into consideration for the issue of debentures.
Determine two different Hamilton circuits in each of the following graphs. A B F G
Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one...
Measures of Internal Business Process Performance DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating...
Measures of Internal Business Process Performance DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating...
The purpose of this assignment is to better understand what the important pieces of the Linux/Unix operating system that you might want to prioritize reviewing when you are doing a forensic...
What is the function of the Helix system? What are the benefits of this tool? How does it work in terms of digital evidence collection? How do you get evidence of Unix, Linux, and Mac OS operating...
Analyzing revenue, expense, and withdrawal transactions into debit and credit parts Use the chart of accounts for Hals Marketing Services given in Application Problem 2-2. Transactions: Mar. 25. Sold...

In what way can the use of ROI for investment centers lead to bad decisions? How does

Question:

Step by Step Answer:

If ROI is used to evaluate performance a manager of an investment center may reject a pro...View the full answer

Managerial Accounting

Students also viewed these Managerial Accounting questions