Respond that the following statements are TRUE or FALSE: 1) The ROI (Return on Investment) formula focuses
Question:
Respond that the following statements are TRUE or FALSE:
1) The ROI (Return on Investment) formula focuses on the amount of operating income earned before other revenue/expense items, such as interest expense, by utilizing the average total assets employed for the year.
2) RI (Residual Income) considers both the division's operating income and its average total assets. In addition, it also incorporates another piece of information known as top management's target rate of return.
3) The target rate of return is the maximum rate of return that top management expects a division to earn with its average total assets.
4) RI (Residual Income) compares the division's actual operating income with the minimum operating income expected given the size of the division's average total assets.
Statistics For The Life Sciences
ISBN: 9780321989581
5th Edition
Authors: Myra Samuels, Jeffrey Witmer, Andrew Schaffner