How does the use of return on investment as a performance measure lead to bad decisions? How
Question:
How does the use of return on investment as a performance measure lead to bad decisions? How do residual income and economic value added overcome this problem?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 70% (10 reviews)
Using ROI to evaluate performance can lead to bad decisions becau...View the full answer
Answered By
Sandra Dimaala
Sandra from Philippines ,LICENSED PROFESSIONAL TEACHER.
Teachers are our nation builders—the strength of every profession in our country grows out of the knowledge and skills that teachers help to instill in our children. And, as a nation, we must do much, much more to fully appreciate and support their work.
0.00
0 Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
How would you respond to the following comment? Residual income and economic value added are identical.
-
Calculating return on investment, residual income, and economic value added Required Compute the missing amounts labeledaq. Segment A Segment B $%1,000,000 $1,500,000 Segment C Segment D Segment E...
-
Steelwall Inc. uses the return on investment as a performance measure and defines investment as the average operating assets. The company bases management bonuses in part on the ROI and expects all...
-
Use the information in Exercise 2-16 to prepare an August 31 balance sheet for Help Today. Hint: Compute the ownerscapital account balance as of August 31. Data from Exercise 2-16 Carmen Camry...
-
For what purposes are the consolidated financial statements prepared?
-
Why might a department store select a fiscal year ending January 31, rather than a fiscal year ending December 31? AppendixLO1
-
How do you understand the concept of religion?
-
A high-tech company purchases a new computing system whose initial value is V. The system will depreciate at the rate f = f (t) and will accumulate maintenance costs at the rate g =g (t), where is...
-
Nelly Inc. has an issue of preferred stock outstanding that currently sells for $ 6 5 per share. If the dividend on this stock is $ 2 . 4 5 every year in perpetuity, what is the required return? ( Do...
-
Multiple Choice Questions: 1. Assume that the opportunity cost of producing a pair of pants in the United States is 2 pounds of rice, while in China, it is 5 pounds of rice. As a result, a. The...
-
Why is it common practice to allocate central costs to measure divisional managerial performance?
-
Explain how economic value added is calculated.
-
Explain the difference between profit or loss, gross profit and EBIT.
-
Building a sense of community is not just a moral thing to do, but also a pragmatic one. In today's competitive and ever-evolving business environment, the organizations that can attract the most...
-
Watch https://youtu.be/U3MtvvNjUR4 What do you think of Dr. Saint's ideas about barriers to change? What do you think about social learning? Could this tool be used to make real change? How can the...
-
1. A concise introduction of the brand, including but not limited to a brief history, location information, size of the business, product/service offering, and so on.Give brief explanation. 2. Which...
-
A wood frame structure as shown to the right. The framingconsists of 2x6 studs, a single 2x6 bottom plate, two 2x6 topplates and a 2x10 joist. The studs are spaced at 16 in. on centerand sheathed...
-
In your reflection journal please list your order - 'most efficient' mediums at the top, 'least efficient' at the bottom. (for eg. social media, display ads, etc)Then, in five hundred words or more,...
-
Calculate the NAVPS for a mutual fund with the following values: Market value of securities in the portfolio ..................... $1.2 billion Liabilities of the fund...
-
A Bloomberg Businessweek subscriber study asked, In the past 12 months, when traveling for business, what type of airline ticket did you purchase most often? A second question asked if the type of...
-
Bob Roman, the major owner of an S corporation, approaches you for some tax planning help. He would like to exchange some real estate in a like-kind transaction under 1031 for real estate that may...
-
Keystone, your tax consulting client, is considering an expansion program that would entail the construction of a new logistics center in State Q. List at least five questions you should ask in...
-
The trend in state income taxation is for states to adopt a version of the unitary theory of multijurisdictional taxation in their statutes and regulations. a. Explain why some states are attracted...
-
ABC company issued a bond on Jan. 1st, 2018. ABC Company prepared the following amortization schedule for the bond. Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value 1/1/2018...
-
ohn has an investment opportunity that promises to pay him $16,000 in four years. He could earn a 6% annual return investing his money elsewhere. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1...
-
Explain the difference between upstream and downstream intraentity transfers and how each affects the computation of noncontrolling interest balances.
Study smarter with the SolutionInn App