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Managerial Accounting

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How are Economic Value Added, Residual Income, and ROI similar?

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How are Economic Value Added (EVA), Residual Income (RI), and Return on Investment (ROI) similar?

A

They are all tools used to manipulate profits and make stock prices rise.

B

They all use accounting income which can be manipulated in the short-term.

C

They all use only assets purchased by the current managers so that decisions of prior managers do not harm their performance rating.

D

All measure how well parts of the business performance compared to industry averages.