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Q. Show the Merits of residual income?
Merits of residual income (RI)
- Consistent or goal congruence with profit maximisation e.g. an enforced measure of profitability.
- Different interest charges (cost of capital) can be applied to divisions e.g. high inherent risk within different industries can have higher cost of capitals applied.
- Forces managers to consider cost of financing new investment and to be efficient when managing working capital for example minimisation of inventory and excessive cash balances.
Discuss the following quotation and please provide examples. Enterprise Architecture is an organising logic for managing change within an Information Systems environ
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what are the advantages of using tha general nine electric model
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