Residual income is sometimes used to overcome the tendency of ROI to discourage investments that are profitable for the company, but that lower the division's ROI.
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Q1: Decreasing inventories leads to a reduction in
Q2: In a decentralized company, central management is
Q3: Turnover is the most common measure of
Q4: The net income reduced by the total
Q6: The direct comparison of the performance of
Q7: Economic value added (EVA) is similar to
Q8: Turnover is the ratio of sales to
Q9: Decentralization is usually achieved by creating units
Q10: Residual income is the difference between operating
Q11: The use of residual income encourages managers
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