All of the Following Statements Reflect Ways in Which ROI

question 22

Multiple Choice

All of the following statements reflect ways in which ROI is used as an evaluation tool EXCEPT:

• A) the ROI of a company division is compared with that of other companies to see how it compares to the competition.
• B) a company compares the ROI of various divisions to determine which one will get additional investment.
• C) the ROI is used to determine the optimum financing mix of debt versus equity.
• D) the ROI is used across time to determine whether a division's performance is improving or not.

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Definitions:

Corporate Status

A legal status that allows a company to operate as its own legal entity, separate from its owners.

Charitable Donations

Voluntary contributions made to nonprofit organizations or causes without expectation of receiving something in return.

Closely Held Corporations

Corporations that have a small group of shareholders with no market for buying or selling company stock. They often involve family businesses.

General Public

Refers to the ordinary people in society who are not involved in any particular profession or specialized group.