Why Is Return on Investment Better Than Income as a Measure

question 91

Multiple Choice

Why is return on investment better than income as a measure of performance for an investment center?

• A)The calculation for income is determined by GAAP, while return on investment is adjusted to meet the needs of the company.
• B)Return on investment is easier to calculate than income.
• C)Return on investment considers the amount invested as well as the income.
• D)Return on investment is forward looking, while income is backward looking.

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Definitions:

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Smaller parts of a larger problem, often used in dynamic programming and divide-and-conquer strategies to simplify complex problems.

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