Which of the Following Is an Advantage of the ROI

Multiple Choice

Which of the following is an advantage of the ROI performance measure?

A) It encourages managers to focus on the relationship among revenues, expenses, and investment.
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 managers to focus on the short run at the expense of the long run.
D) It produces a narrow focus on divisional profitability at the expense of the profitability of the overall firm.