The MAJOR Criticism of Using Return on Investment (ROI)for Financial

question 14

Multiple Choice

The MAJOR criticism of using return on investment (ROI) for financial control is that it:

• A)gives managers an incentive to reject projects with an ROI greater than the company's required rate of return but less than the department's current ROI.
• B)usually uses the blended rate of capital as the required rate of return.
• C)encourages competition among segment managers.
• D)is a measure of overall performance.

---

Definitions:

Effect Size

A numerical measure that quantifies the size of a phenomenon or the intensity of the connection between variables.

Standard Error

A statistical term that measures the accuracy with which a sample distribution represents a population by using standard deviation.

Population Standard Deviation

A measure of the spread of scores within a set of data, calculated as the square root of the variance for the entire population.

Sample Size

The number of individuals or observations included in a sample drawn from a larger population for the purpose of statistical analysis.