An Advantage of ROI as a Measure of Performance Is

question 19

Multiple Choice

An advantage of ROI as a measure of performance is that

• A) it is sensitive to book value.
• B) it provides an incentive to use existing assets efficiently.
• C) the time span of concern in short range.
• D) the business cycle strongly affects ROI performance often despite managerial performance.
• E) it is a steering control.

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Definitions:

Financial Statements

Records that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Raw Materials

Basic materials that are used in the production process to manufacture goods, including commodities like metals, oils, and agricultural products.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold or distributed.

Discount Period

A specific time frame during which a reduced price or rate is offered to encourage purchases or investments.