List and briefly discuss the two limitations of financial performance measures
What will be an ideal response
Measurement issues-Both the return on investment and residual income calculations use the term average total assets. Management must decide whether to use a simple average, which assets should be included, and whether the gross or the net book value should be used.
Short-term focus-Financial performance measures have a short-term focus. This focus may cause managers to make decisions that increase measures in the short term but hurt the company in the long term.
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Most companies begin with an early founding impulse for truth, justice, and the stakeholder way.
a. true b. false
While preparing your risk responses, you identify additional risks. What should you do?
A. Document the new risks and calculate the expected monetary value based on the probability and impact of the occureneces. B. Add reserves to the project to accommodate the new risks and notify management. C. Add a 10 percent contingency to the project budget and notify the customer. D. Determine the risk events and the associated costs, then add the cost to the project budget as a reserve.