After studying this chapter, you should be able to . . .

1. Explain the use and limitations of return on investment (ROI) for evaluating investment centers
2. Explain the use and limitations of residual income (RI) for evaluating investment centers
3. Explain the use and limitations of economic value added (EVA^®) for evaluating investment centers
4. Explain the objectives of transfer pricing, and the advantages and disadvantages of various transfer-pricing alternatives
5. Discuss important international issues that arise in transfer pricing