Some disadvantages of relying solely on financial measures include that: (Check all that apply.)Multiple select question.some profitable opportunities may be rejected to keep return on investment high.they can encourage managers to focus too heavily on long-term goals.they require managers to focus on too many perspectives.they can encourage managers to focus too heavily on short-term financial goals.residual income is not as useful when comparing investment centers of different sizes.
Question
Some disadvantages of relying solely on financial measures include that: (Check all that apply.)Multiple select question.some profitable opportunities may be rejected to keep return on investment high.they can encourage managers to focus too heavily on long-term goals.they require managers to focus on too many perspectives.they can encourage managers to focus too heavily on short-term financial goals.residual income is not as useful when comparing investment centers of different sizes.
Solution
The disadvantages of relying solely on financial measures include:
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Some profitable opportunities may be rejected to keep return on investment high: This is because financial measures often focus on immediate returns rather than long-term profitability. Therefore, opportunities that require significant upfront investment but promise high returns in the future may be overlooked.
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They can encourage managers to focus too heavily on short-term financial goals: Financial measures typically emphasize short-term performance. This can lead managers to prioritize immediate financial gains over long-term strategic goals, which can ultimately harm the organization's sustainability and growth.
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Residual income is not as useful when comparing investment centers of different sizes: Residual income is a measure of profitability that considers the cost of capital. However, it may not provide a fair comparison between investment centers of different sizes, as larger centers may have higher residual income simply due to their size, not because they are more efficient or profitable.
The other options provided do not accurately represent disadvantages of relying solely on financial measures. For instance, financial measures do not necessarily encourage managers to focus too heavily on long-term goals, nor do they require managers to focus on too many perspectives.
Similar Questions
Multiple Select QuestionSelect all that applySome disadvantages of relying solely on financial measures include that: (Check all that apply.)Multiple select question.they can encourage managers to focus too heavily on short-term financial goals.they require managers to focus on too many perspectives.some profitable opportunities may be rejected to keep return on investment high.they can encourage managers to focus too heavily on long-term goals.residual income is not as useful when comparing investment centers of different sizes.
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