Residual Income and Return on Investment are commonly used measures of performance. However, they are frequently criticised for placing too great an emphasis on the achievement of short- term results, possibly damaging longer-term performance. You are required to discuss

(a) the issues involved in the long-term:short- term conflict referred to in the above state- ment; (11 marks)

(b) suggestions which have been made to recon- cile this difference. (11 marks) (Total 22 marks)