Determine which is not a disadvantage of residual income

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Reference no: EM132502722

Question 1: Which of the following is NOT a disadvantage of Residual Income as a performance measure?

Group of answer choices

1) Residual Income cannot be used as a relative performance measure

2) Residual Income does not always align managers' interests with shareholders' interests

3) None of the answers are disadvantages of Residual Income

4) All of the answers are disadvantages of Residual Income

5) The magnitude of Residual Income generally depends on the sheer magnitude of the investment

6) Residual Income depends on the required rate of return, which is often difficult to estimate

Reference no: EM132502722

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