How will decreases in the following items affect residual income A a B b C c D

How will decreases in the following items affect

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35.How will decreasesin the following items affect residual income? A. B. C. D.dDecreasing expenses increases income and will increase residual income. A decrease in inventory will decrease assets which will increase residual income. a b c AACSB: Analytic AICPA: FN-Decision Making Blooms: Application Difficulty: Medium Lanen - Chapter 14 #35 Learning Objective: 3 Topic Area: Residual Income Measures 36.How will increasesin the following items affect residual income? a b d AACSB: Analytic AICPA: FN-Decision Making Blooms: Application Difficulty: Medium Lanen - Chapter 14 #36 Learning Objective: 3 Topic Area: Residual Income Measures
37.Which of the following should notbe used for the cost of capital to compute residual income? AACSB: Analytic AICPA: FN-Decision Making Blooms: Application Difficulty: Medium Lanen - Chapter 14 #37 Learning Objective: 3 Topic Area: Residual Income Measures 38.A manager can always increase his/her return on investment (ROI) by AACSB: Analytic AICPA: FN-Decision Making Blooms: Application Difficulty: Medium Lanen - Chapter 14 #38 Learning Objective: 2 Topic Area: Return on Investment 39.Which one of the following items would most likely notbe incorporated into the calculation of a division's investment base when using the residual income approach for performance measurement and evaluation? A.Land being held by the division as a potential site for a new plant and parking lot.B. Division inventories when division management exercises control over the inventory levels.C. Division accounts payable when division management exercises control over the amount of short-term credit utilized.D. Division accounts receivable when division management exercises control over credit policy and credit terms.Land is a strategic asset which is not controlled by the divisional manager. AACSB: Analytic AICPA: FN-Decision Making Blooms: Comprehension Difficulty: Easy Lanen - Chapter 14 #39 Learning Objective: 3 Topic Area: Residual Income Measures

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