Show the merits of residual income, Strategic Management

Assignment Help:

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.


Related Discussions:- Show the merits of residual income

Explain shared service centre model, TFX is a multinational company which m...

TFX is a multinational company which manufactures and retails branded designer clothing with business units in a number of different countries globally. Up unless now, each of the

What do you mean by trade payable days, Q. What do you mean by Trade payabl...

Q. What do you mean by Trade payable days? Trade payable days (turnover)   {Yearend trade payables / Credit purchases (or cost of sales)} x   365 days This is the length

Framework for a company to manage its application portfolio, Question 1: ...

Question 1: (a) Explain a framework for a company to manage its application portfolio. (b) Apply the application portfolio concept to show the different applications for a

Student.., ambassador is aknown brand in ethiopa. the company produces diff...

ambassador is aknown brand in ethiopa. the company produces different kinds of product that assisting the company to generate maximum profit more that of competitors. today the com

Systematic analysis, At this time, take a step back and clear your head. Sp...

At this time, take a step back and clear your head. Spend a few moments in deeper thought about yourself, in a self-evaluative manner. Then, describe how you will incorporate what

Management, What can middle managers do to moderate the distortions introdu...

What can middle managers do to moderate the distortions introduced by such biases?

Strategic planning, advantages and disadvantages of strategic planning

advantages and disadvantages of strategic planning

Product and experience analysis, Product and experience analysis: The p...

Product and experience analysis: The product under research is Hotel Arpanaa, a holistic hotel located at Tiruvanamalai, India. It is a holitel that offers holistic experience

Strategy and organization analysis, 1. Describe and analyze the environment...

1. Describe and analyze the environment, strategy, and structure of your organization of choice. It is critical to provide evidence for your analysis. 2. Assess the challenges and

Open group architecture framework, Discuss the following quotation and ...

Discuss the following quotation and please provide examples. Enterprise Architecture is an organising logic for managing change within an Information Systems environ

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd