All of the following statements reflect ways in which ROI is used as an evaluation tool EXCEPT:
A) the ROI of a company division is compared with that of other companies to see how it compares to the competition.
B) a company compares the ROI of various divisions to determine which one will get additional investment.
C) the ROI is used to determine the optimum financing mix of debt versus equity.
D) the ROI is used across time to determine whether a division's performance is improving or not.

Question

Quizplus · Accepted Answer

While ROI can be used to evaluate the performance of a company or its divisions over time and compared with competitors, it is not typically used to determine the financing mix of debt versus equity. Instead, other financial ratios and considerations are used for this purpose.

All of the Following Statements Reflect Ways in Which ROI