Question
44. Which of the following statements contrasting residual income with return on investment is correct? A. ROI may lead to goal incongruence while residual income
44. Which of the following statements contrasting residual income with return on investment is correct? A. ROI may lead to goal incongruence while residual income does not. B. ROI is a lagging indicator while residual income is a leading indicator. C. Residual income is a financial measure while return on investment emphasizes the customer perspective.
D. Residual income is a long-term measure while ROI is a short-term measure.
45*. Antaya Corp. has revenues of $1,500,000 resulting in an operating income of $105,000. Average invested assets total $750,000, and the hurdle rate is 6%. Calculate the residual income if sales increase by 10% and the profit margin and invested assets remain constant. A. $115,500 B. $45,000 C. $0 D. $70,500
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