A Company May Prefer to Use Residual Income Over Return

Multiple Choice

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

A) return on investment is absolute figure but residual income is a ratio.
B) residual income is more likely to lead to goal congruence than return on investment.
C) it is easier to calculate residual income than return on investment.
D) residual income considers three elements but return on investment considers only two elements.