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Which of the following is a legitimate disadvantage of residual income? It does not explicitly capture cost of capital in the computation of the measure.

Which of the following is a legitimate disadvantage of residual income? It does not explicitly capture cost of capital in the computation of the measure. It does not encourage managers to accept all projects above the minimum return. It is not an effective basis for comparing divisions of substantially different sizes It does not provide any new information beyond ROI.

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