Using what measure may cause a manager to reject a project that would be profitable for the company as a whole?
A) ROI
B) Residual income
C) Operating income
D) EVA

Question

Quizplus · Accepted Answer

ROI (Return on Investment) measures the profitability of a project relative to its cost. However, a manager may reject a project that has a high ROI because it may require a significant investment of capital or resources that could be used for other projects with even higher ROI. This decision may be based on the company's overall strategic priorities and resource allocation. Therefore, ROI alone may not be enough to make a decision about the viability of a project.

Using What Measure May Cause a Manager to Reject a Project