Last year, Western Division had a ROI of 15%. The manager of the Western Division is considering an additional investment for the coming year. What step will the manager likely choose to take?
A) accept the investment as long as its ROI is positive
B) reject the investment if it returns less than 15% ROI
C) reject the investment if it returns more than 15% ROI
D) accept the investment as long as it provides positive operating income

Question

Quizplus · Accepted Answer

The manager of the Western Division should reject any investment that returns less than 15% ROI, as this would lower the overall ROI for the division. Accepting an investment with a lower ROI could also be seen as a poor allocation of resources. Therefore, the best choice is to reject any investment with a lower ROI than the previous year's ROI.

Last Year, Western Division Had a ROI of 15