Please provide the best match for each of the following: Residual Income (R) V C

Question

Please provide the best match for each of the following: Residual Income (R) V Choose Value-Added Time Return on Investment (ROI) Cash Cushion Transfer Price DuPont Method Needs Performance evaluation is so much more than just financial ratios Not responsible for directly generating revenues Expected sales plus desired ending inventory A drill-down approach to employing the most popular ratio for evaluating investment centers "Cycle Efficiency" multiplied by "Cycle Time" Can lead to the rejection of profitable projects The amount of dollars left over after removing the Required Return. Provides flexibility and security Continuous budget Cost of Goods Sold for one of the divisions in an intracorporate transaction Choose.. Choose... Choose... Choose... Balanced Scorecard Rolling Budget Cost Center

Explanation / Answer

Residual Income (RI) The amount of dollars left over after removing required return [RI = Actual income (-) Required return] Value-Added time "Cycle efficiency" multiplied by "Cycle time" [Value added time is the actual time spent processing] Return on investment (ROI) Provides flexibility and security Cash Cushion Expected sales plus desired ending inventory Transfer Price Cost of goods sold for one of the divisions in an intracorporate transaction DuPont Method A drill down approach to employing the most popular ratio for evaluating investment centers [Under DuPont method , ROE = Profit margin * Asset turnover (Asset usage efficiency)* Equity multiplier (Leverage). These 3 components are can further broken down. ] "Needs" Can lead to rejection of profitable projects Balanced Scorecard Performance evaluation is so much more than just financial ratios [This is used to identify and improve various internal functions of any organization - Collecting and analysing information, investigating gaps etc in manufacturing process, customer satisfaction, evaluating financial ratios- leading to active management] Rolling Budget Continuous budget Cost Center Not responsible for directly generating revenues

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