Using ________ may cause a manager to reject a project that may be profitable to the company as a whole.
A)operating income
B)residual income
C)ROI
D)EVA

Question

Quizplus · Accepted Answer

ROI (Return on Investment) measures the profit earned in relation to the amount of investment made. A manager may reject a project that has a low ROI, even if it would bring in profits for the company as a whole. This is because they are only concerned with the returns on their investment and not the overall benefit to the company. Therefore, using ROI as the sole criterion for decision-making may not necessarily lead to the best outcome for the company.

Using ________ May Cause a Manager to Reject a Project