A problem with rewarding managers only on the basis of residual income is that:
A)on occasion,the items in the residual income calculation are not quantifiable.
B)residual income is difficult to measure.
C)residual income can depend on items over which the manager has little control.
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

Residual income can be influenced by factors outside a manager's control, such as economic conditions or changes in corporate policy, making it an imperfect measure of a manager's performance.

A Problem with Rewarding Managers Only on the Basis of Residual