51. Which of the following statements regarding ROI computations istrue? A. Net income after interest and taxes is most frequently used as the measure of income in the ROI formula.B. The fair market value of assets without regard to depreciation is used as a measure of operating assets in the ROI formula.C. Assets used in the ROI formula are generally measured as an average of beginning and end of period numbers.D. All assets, including those that are idle or held for resale, are included in the ROI formula.
52. Residual income: A. is most useful as a way to compare individual divisions of different sizes.B. is the amount of income earned in excess of a predetermined minimum rate of return on assets.C. should not be used as a way to evaluate the manager of an investment center.D. is often called economic value added (EVA).
53. Residual income: A. is an alternative to ROI for manager performance evaluation..B. is the amount of income earned in excess of a predetermined minimum level of return on assets.C. is equal to ROI – (Average operating assets ´ Minimum required rate of return)D. both A and B.
54. Which of the following statements comparing ROI and residual income is correct? A. ROI is more useful as a performance measure for a single investment center.B. Residual income is a better comparative measure than ROI.C. ROI and residual income are equally good performance measures for a single investment center.D. Residual income is more useful as a performance measure for a single investment center.
55. Which of the following is the correct formula to compute residual income? A. Average operating assets – Net operating incomeB. Average operating assets – (Net operating income ´ Minimum required rate of return)C. Net operating income ´ Minimum required rate of returnD. Net operating income – (Average operating assets ´ Minimum required rate of return)
56. Duncan Ltd. has the following information available for one its divisions in the current year:
Sales revenue
$3,000,000
Operating expenses
1,750,000
Average operating assets
4,000,000
Duncan requires each of its divisions to generate a minimum return of 20%. What is this division’s residual income? A. $200,000B. $450,000C. $700,000D. $1,250,000
57. Shannon Pharmaceuticals has the following information available for one of its divisions in the current year:
Sales revenue
$10,000,000
Operating expenses
4,500,000
Average operating assets
4,000,000
The company requires each of its divisions to generate a minimum return of 30%. What is this division’s residual income? A. $1,500,000B. $4,300,000C. $2,350,000D. $8,800,000
58. ABC Inc. has the following information available for one of its divisions:
Average operating assets
$7,000,000
Return on investment (ROI)
25%
Sales
$6,000,000
If ABC requires a minimum return on its investments of 20%, what is their residual income? A. $1,500,000B. $6,000,000C. $1,750,000D. $350,000
59. When comparing two different investment alternatives of different sizes, which of the following measures for each alternative would be the best to use? A. Return on investmentB. Residual incomeC. Net incomeD. Contribution margin ratio
60. Which of the following statements about the balanced scorecard approach is true? A. The four perspectives of the balanced scorecard revolve around measures of quality, productivity, efficiency and timeliness, and marketing success.B. The balanced scorecard approach requires looking at performance from four different but related perspectives: financial, customer, internal business, and learning and growth.C. The balanced scorecard approach integrates financial and nonfinancial performance measures.D. All of these are true.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more