The Use of Return on Investment (ROI)as a Short-Term Performance

question 204

True/False

The use of return on investment (ROI)as a short-term performance measure may lead managers to reject projects that may be profitable for the company as a whole.

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Definitions:

Significance Level

Another term for level of significance, indicating the critical probability level at which the results of a statistical test are deemed significant.

Null Hypothesis

A statement or assumption that there is no significant difference or effect, tested against an alternative hypothesis in statistical analysis.

Null Hypothesis

A hypothesis stating that there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.

Type II Error

The error that occurs when a statistical test fails to reject a false null hypothesis, often referred to as a "false negative" finding.