Question
Which of the following statements concerning performance evaluation tools used in decentralized operations is correct? Question 6 options: A segment's return on investment is calculated
Which of the following statements concerning performance evaluation tools used in decentralized operations is correct?
Question 6 options:
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A segment's return on investment is calculated by multiplying a segment's residual income by the capital turnover ratio.
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Segment margin is calculated by subtracting all fixed costs from the segment's contribution margin.
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Performance reports can only be used to evaluate the performance of investment centers.
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Segmented income statements are also referred to as budget versus actual reports.
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A positive residual income demonstrates that a segment's return on investment is greater than the company's target rate of return.
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