Which of the following statements about ROI is false?
A) ROI is used to measure the performance of investment centers.
B) ROI = margin divided by investment turnover.
C) Trying to maximize ROI can result in a conflict between the interest of a particular manager and the interest of the business as a whole.
D) The book value of operating assets is frequently used as the investment base for calculating return on investment.

Question

Quizplus · Accepted Answer

ROI = (income/investment) or (margin x investment turnover). Therefore, ROI is not equal to margin divided by investment turnover.

Which of the Following Statements About ROI Is False