Are the techniques discussed in the chapter of return on investment, residual income and economic value added sufficient to evaluate a business unit or should other non-financial measures be used? What about the ethical considerations of responsibility to communities, employees, and other stake-holders? Are these considerations important and will they impact financial measures?
Using the information below to help answer the problem.
• Describe the function of a strategic investment unit
• Discuss implementation of appropriate transfer prices
• find out return on investment, residual income and economic value added and use them to evaluate the performance of a business unit