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

ROI does not encourage managers of departments with high ROIs to invest in average ROI projects. In fact, it may incentivize them to only pursue projects with high ROIs, even if they are not the most beneficial for the company overall.

Which of the Following Is NOT an Advantage of ROI