At ABC company you are on a panel of 5 managers that are evaluating segment performance at year-end. Once your evaluation of each segment is completed each division manager will be awarded a performance bonus based on the results. Your fellow managers Linda and Tim argue that return on investment (ROI) as it relates to each segment is the most important metric to determine performance and subsequently the dollar amount of bonuses to be given. Although ROI is important Bill and Sue argue that residual income is a better indication of performance for each segment which is easier to interpret and more useful for bonus calculations. Since the managers are divided on what metric to use you must break the tie and select which metric to use. Explain why you would select ROI or residual income to evaluate each segment of company ABC and how you would use it to determine year-end bonus calculations.

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