Question: Managerial performance can be measured in many different ways including return on investment and residual income. A good reason for using residual income instead of
Managerial performance can be measured in many different ways including return on investment and residual income. A good reason for using residual income instead of ROI is: Residual income can be computed without having to measure operating assets. O Managers are more likely to accept projects that are beneficial to the company. O ROI does not take into account both turnover and margin. A minimum rate of return does not have to be specified when the residual income approach is used
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