Author Question: Using residual income as a measure of performance rather than return on investment promotes goal ... (Read 122 times)

littleanan · **on:** Mar 6, 2021

Question 1

Times Corporation, whose tax rate is 30%, has two sources of funds: long-term debt with a market value of $6,500,000 and an interest rate of 7%, and equity capital with a market value of $18,000,000 and a cost of equity of 11%. Times Corporation's after-tax cost of debt is ________.
◦ 9.38%
◦ 4.90%
◦ 7.00%
◦ 11.00%

Question 2

Using residual income as a measure of performance rather than return on investment promotes goal congruence because residual income ________.
◦ places importance on the reduction of underperforming assets
◦ calculates a percentage return rather than an absolute return
◦ concentrates on maximizing an absolute amount of dollars
◦ concentrates on maximizing the return on sales

jgranad15 · **Reply #1 on:** Mar 6, 2021

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 32% of students answer this correctly