Which of the following is an advantage of the ROI performance measure?
A)It encourages managers to focus on the relationship among revenues, expenses, and investment.
B)It discourages managers from investing in projects that would decrease divisional ROI but increase the profitability of the company as a whole.
C)It encourages managers to focus on the short run at the expense of the long run.
D)It produces a narrow focus on divisional profitability at the expense of the profitability of the overall firm.

Question

Quizplus · Accepted Answer

The advantage of ROI as a performance measure is that it encourages managers to focus on the relationship among revenues, expenses, and investment. This helps them make decisions that will maximize return on investment and improve the division's profitability.

Which of the Following Is an Advantage of the ROI