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A company may prefer to use residual income over return on investment for performance evaluation ...

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A company may prefer to use residual income over return on investment for performance evaluation ...

A company may prefer to use residual income over return on investment for performance evaluation because ________.
A) residual income considers three elements but return on investment considers only two elements
B) residual income is easier to calculate than return on investment
C) residual income is a ratio but return on investment is an absolute figure
D) residual income is more likely to lead to goal congruence than return on investment is

Textbook

Horngren's Financial & Managerial Accounting, The Financial Chapters

Edition: 5^th

Authors: Miller-Nobles, Mattison, Matsumura

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