Indicate whether each of the following statements is true or false.

Use of residual income to evaluate managers of an investment center may avoid some of the suboptimization that can occur with use of return on investment as a performance measure.

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Residual income is stated as a ratio or percentage.

One disadvantage with residual income as a measure of performance is that it causes smaller divisions to appear to do better than larger divisions.

A balanced score card includes various nonfinancial performance measures as well as financial performance measures.

The balanced scorecard is a holistic approach to evaluating management and division performance.