Which of the following is NOT a disadvantage of the ROI performance measure?
A)It encourages managers to focus on the long run rather than the short run.
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 myopic behavior.
D)All are disadvantages of the ROI measure.

Question

Quizplus · Accepted Answer

The statement "It encourages managers to focus on the long run rather than the short run" is actually an advantage of the ROI performance measure. The other choices, B and C, are both recognized disadvantages of ROI, and D incorrectly states that all of the choices are disadvantages.

Which of the Following Is NOT a Disadvantage of the ROI