What is residual income and how is it computed? Is it better for residual income to be high or low?
Residual income (RI) is another alternative return on investment (ROI) that can be used to measure a segment's performance. It is the amount of income earned in excess of a predetermined minimum rate of return on assets.
The exact formula is as follows:
RI = Net operating income - (Average operating assets x Minimum required rate of return)
In general, the higher it is, the better.
200 ) The manager of a local department store, Nelda Smith, has just been informed that she will start being evaluated on the basis of her segment's ROI in relation to the ROI values of other department stores owned by her employer. Give three ways she can increase her segment's ROI?
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A. It is considered to be the most expensive means of getting information out. B. It provides a wealth of opportunity for companies that want to share their message about products and services with the world. C. It always leaves a negative impact on the company's image since employees discuss their job, talk about issues, and vent their frustrations. D. It is currently the least preferred medium of marketing for companies.
Explain the characteristics of management fraud
Under the "procuring cause" rule, when the agent is the primary factor in a purchase, the agent ________.
A. is not entitled to compensation if the principal completes the purchase B. may be entitled to compensation only if he completes the sale C. is not entitled to compensation after termination of the agency relationship D. may be entitled to a commission regardless of who eventually completes the sale
If the object of a contract becomes illegal after the contract is entered into, the parties are discharged from the contract
Indicate whether the statement is true or false