Question

Return on investment, residual income, and economic value added ______. always lead managers to make decisions that are in the best interest of the organization are all lagging measures of performance should be the only factors used to determine managers' performance and rewards

Answer 1

are all lagging measures of performance

Step-by-step explanation:

Return on investment, residual income, and economic value added are all lagging measures of performance.

When it comes to divisional performance measures, Return on investment (ROI), residual income (RI), and economic value added (EVA) are all lagging measures of performance they link objectives with performance and present a common basis on which all divisional or branch managers in a decentralized organization, are measured.

A lagging indicator of performance is any measurable or observable variable (performance), that changes after a change has occurred in a target variable (returns).

Hence these methods are lagging methods because a manager can only be said to have performed when such manager has generated returns, revenue or economic value.