Which THREE of the following threats of dysfunctional behaviour may arise from VBN's use of residual income to measure subsidiaries' performance?

Which THREE of the following threats of dysfunctional behaviour may arise from VBN’s use of residual income to measure subsidiaries’ performance?

VBN is a multinational company that has 60 subsidiary companies that operate in 11 countries. VBN evaluates the performance of each subsidiary as an investment centre, using residual income to measure performance.

Which THREE of the following threats of dysfunctional behaviour may arise from VBN’s use of residual income to measure subsidiaries’ performance?
A . Subsidiary boards may actively hedge translation risks.
B . Subsidiary boards may take a short-term view to investment projects.
C . Subsidiary boards may waste time by arguing over transfer prices.
D . Subsidiary boards may waste time and incur unnecessary fees in order to recognise gains on the revaluation of property.
E . Subsidiary boards may be motivated to spend heavily on capital expenditure in order to ensure that budget allocations are maintained and even increased.

Answer: A,B,C