Which of the following is not an advantage of ROI?
A) It encourages managers of departments with high ROIs to invest in average ROI projects.
B) It encourages managers to pay careful attention to the relationships among sales, expenses, and investment.
C) It encourages cost efficiency.
D) It discourages excessive investment in operating assets.

Question

Quizplus · Accepted Answer

The statement is not true. In fact, ROI encourages managers to invest in projects with high ROI regardless of the department they belong to. Having a high ROI project can still benefit the overall performance of the company, even if it is not in the same department with the highest ROI.

Which of the Following Is Not an Advantage of ROI