The use of return on investment (ROI)as a performance measure may lead managers to reject projects that would be profitable for the company as a whole.

Question

Quizplus · Accepted Answer

ROI focuses on the financial returns of a project, but may not take into account other factors such as long-term strategic benefits or non-financial impacts. Therefore, a project that has a lower ROI but offers other benefits may be rejected, even though it could be profitable for the company as a whole.

The Use of Return on Investment (ROI)as a Performance Measure