Suppose Deed Corporation evaluates managerial performance using return on investment.Edith Carolina, as president of the company, may view the opportunity for taking on the cosmetics line differently from Michael Sanders, manager of the Cosmetics Division.What action would each of them prefer with respect to the decision of whether to take on the new cosmetics line?

Question

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From the perspective of the company, Carolina would want to accept the project because its return on investment exceeds the minimum required rate of return.From the perspective of the Cosmetics Division, Sanders would reject the project because it would reduce the Division's return on investment.

Suppose Deed Corporation Evaluates Managerial Performance Using Return on Investment