1. If Mason Industries continues to use return on investment as the sole measure of division...
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1. If Mason Industries continues to use return on investment as the sole measure of division performance, explain why JSC would be reluctant to acquire RLI. Be sure to support your answer with appropriate calculations. 2. If Mason Industries could be persuaded to use residual income to measure the per- formance of JSC, explain why JSC would be more willing to acquire RLI. Be sure to support your answer with appropriate calculations. 3. Discuss how the behavior of division managers is likely to be affected by the use of: a. Return on investment as a performance measure b. Residual income as a performance measure (CMA adapted) 1. If Mason Industries continues to use return on investment as the sole measure of division performance, explain why JSC would be reluctant to acquire RLI. Be sure to support your answer with appropriate calculations. 2. If Mason Industries could be persuaded to use residual income to measure the per- formance of JSC, explain why JSC would be more willing to acquire RLI. Be sure to support your answer with appropriate calculations. 3. Discuss how the behavior of division managers is likely to be affected by the use of: a. Return on investment as a performance measure b. Residual income as a performance measure (CMA adapted)
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1 Reluctance to Acquire RLI Under Return on Investment ROI as the Sole Measure If Mason Industries uses ROI as the sole measure of division performanc... View the full answer
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