The minimum desired ROI rate
A)is based on industry averages.
B)is based on a division's operating characteristics.
C)is equal to the company's cost of funds.
D)is set by generally accepted accounting principles.

Question

Quizplus · Accepted Answer

The minimum desired ROI rate is based on a division's operating characteristics, as each division may have different goals and expectations for returns on investment. Industry averages, the company's cost of funds, and generally accepted accounting principles may be factors considered in setting the minimum desired ROI rate, but they are not the sole determinants.

The Minimum Desired ROI Rate