A Company Which Favors the Residual Income Approach to Financial

Multiple Choice

A company which favors the residual income approach to financial performance evaluation wants managers to ________.

A) concentrate on maximizing an absolute amount of dollars of residual income as opposed to a percentage yield as is the case with ROI
B) concentrate on maximizing a percentage return in excess of the cost of capital
C) maximize the investment turnover ratio
D) maximize return on sales