(b) Explain how the adoption of residual income (RI) using the annuity method of depreciat

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(b) Explain how the adoption of residual income (RI) using the annuity method of depreciation might prove to

be a superior basis for the management incentive plan operated by NCL plc.

(N.B. No illustrative calculations should be incorporated into your explanation). (4 marks)

参考答案:

(b) The use of residual income as a basis for the management incentive plan operated by NCL plc would have the followingadvantages:Divisional management would be more willing to accept a project with a positive residual income and this would contributeto

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