Which of the Following Situations Is Most Likely to Pose

question 62

Multiple Choice

Which of the following situations is most likely to pose a problem for companies that use return on investment (ROI) as a measure of a manager's performance?

• A) Managers may be encouraged to purchase more operating assets than they otherwise should.
• B) Managers may be discouraged from purchasing operating assets that could improve overall profitability.
• C) Managers may be discouraged from reducing their division's costs.
• D) Managers may be discouraged from paying off debt in order to reduce interest costs.

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Definitions:

President Truman

Harry S. Truman, the 33rd President of the United States, who served from 1945 to 1953 and is known for ending World War II by using atomic bombs on Japan.

Totalitarianism

The term that describes aggressive, ideologically driven states that seek to subdue all of civil society to their control, thus leaving no room for individual rights or alternative values.

Individual Rights

Describes the rights and freedoms that are guaranteed to each person, typically protected by law, from unwarranted government interference.

Soviet Union

A socialist state that existed from 1922 to 1991 in Eurasia, officially known as the Union of Soviet Socialist Republics (USSR), which was a federal union of multiple national republics.