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Unformatted text preview: Illustration 21A-4 Residual income comparison This example illustrates how performance evaluation based on ROI can be misleading and can even cause managers to reject projects that would actually increase income for the company. As a result, many companies such as Coca-Cola , Briggs and Stratton , Eli Lilly , and Siemens AG use residual income (or a variant often referred to as economic value added) to evaluate investment alternatives and measure company performance....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.
- Fall '11