Which of the Following Is Not a Criticism of Using

question 52

Multiple Choice

Which of the following is not a criticism of using return on investment (ROI) for divisional performance evaluation?

• A) ROI may not capture and reflect value creation in the "new economy."
• B) ROI does not take into consideration the amount of capital invested in the division whose performance is being evaluated.
• C) The ROI metric has a short-term focus/orientation.
• D) ROI fails to capture broader elements of "performance," beyond financial performance.
• E) There is a disconnect between models used for the analysis of long-term capital investment projects and subsequent evaluation of the financial results of those projects using ROI.

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