A manager is evaluated based on return on investment.The corporate minimum required return is 11 percent and the manager runs a division that has attained a 14 percent return on investment.Which of the following statements is true?
A)The manager will most likely not invest in a project that has a return on investment of 13 percent.
B)The manager will invest in all projects that increase operating income.
C)The manager will not consider projects that exceed 14 percent.
D)The manager may prefer to invest in projects that have a return on investment that is very close 11 percent to stay in line with corporate expectations.

Question

Quizplus · Accepted Answer

The manager's performance is evaluated based on return on investment (ROI), and since the division already has a ROI of 14%, investing in a project with a lower ROI of 13% could potentially lower the division's overall ROI, making it less attractive for the manager under this evaluation metric.

A Manager Is Evaluated Based on Return on Investment