Which of the following is considered a disadvantage of return on investment (ROI)?
A) ROI encourages managers to look carefully at relationships between sales
B) revenues, expenses, and investment
C) ROI encourages cost efficiency
D) ROI discourages managers of subunits with high ROIs to invest in projects with low ROIs that are . acceptable to the organization as a whole
E) ROI discourages excessive investment in operating assets

Question

Quizplus · Accepted Answer

ROI can discourage managers of high-performing subunits from investing in projects that have ROIs below their current levels but are still above the company's minimum acceptable rate of return, potentially leading to suboptimal investment decisions for the company as a whole.

Which of the Following Is Considered a Disadvantage of Return