COMMERCE 2AB3 Study Guide - Final Guide: Operating Expense, Bundesautobahn 63, Earnings Before Interest And Taxes
27 Nov 2018
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True/false: suppose a company evaluates divisional performance using both roi and residual income. The company"s minimum required rate of return for the purposes of residual income calculations is 12%. If a division has a residual income of ,000, then its roi is less than 12%. Level: medium lo: 1,2 ans: f: return on investment (roi) encourages managers to accept all investment decisions that will benefit the company as a whole when it is used as a measure of performance. Level: medium lo: 1 ans: f: just-in-time practices improve return on investment (roi) by decreasing turnover. Level: hard lo: 1 ans: f: under a responsibility accounting system, fewer expenses are charged against managers the higher one moves upward in an organization. Level: medium lo: 3 ans: f: responsibility accounting functions most effectively in decentralized organizations. Level: easy lo: 3 ans: t: in a strongly centralized organization there is a large amount of freedom to make decisions at all levels of management.
