The use of residual income reduces, but does not eliminate, the suboptimization problem.

Name: The use of residual income reduces, but does not eliminate, the suboptimization problem.
Brand: Quizplus
Rating: 4.7 (32 reviews)

Question

Quizplus · Accepted Answer

Residual income helps align individual performance with overall company goals, but it does not completely eliminate the potential for suboptimization, where managers may still make decisions that benefit their division at the expense of the company as a whole.

The Use of Residual Income Reduces, but Does Not Eliminate