Evaluate whether each statement is true or false.

1. Residual income is superior to return on investment as a means of measuring performance because it encourages managers to make investment decisions that are more consistent with the interests of the company as a whole. [ Select ] ["False", "True"]

2. Balanced scorecards are typically a standard template and do not require much customization from company to company. [ Select ] ["True", "False"]

3. All other things being the same, a decrease in average operating assets will decrease residual income. [ Select ] ["False", "True"]

4. A disadvantage to using the residual income approach is that smaller divisions of a company can appear to be managed more poorly than larger divisions of the same company [ Select ] ["False", "True"]

5. All other things being the same, operating expenses have direct relationship with ROI, so a decrease operating expenses will result in a decrease in ROI