Which of the following statements does not represent a limitation of using return on investment (ROI) for measuring and evaluating performance?
A) ROI uses accounting income which is based on historical information.
B) ROI cannot be used to compare divisions of different sizes.
C) ROI has the potential to create goal congruence problems.
D) ROI fails to align some costs incurred in one period with the benefits received in another period.

Question

Quizplus · Accepted Answer

ROI can be used to compare divisions of different sizes by using percentage returns, which standardizes the measure regardless of the size of the investment.

Which of the Following Statements Does Not Represent a Limitation