Which of the Following Is NOT an Advantage of ROI

question 133

Multiple Choice

Which of the following is NOT an advantage of ROI?

• A)It encourages managers of departments with high ROIs to invest in average ROI projects.
• B)It encourages managers to pay careful attention to the relationships among sales, expenses, and investment.
• C)It encourages cost efficiency.
• D)It discourages excessive investment in operating assets.

---

Definitions:

Midpoint Method

A technique used in economics for calculating elasticity by averaging the starting and ending prices and quantities.

Cross-Price Elasticity

Measure of how the quantity demanded of one good responds to a change in the price of another good.

Positive

Affirmative, constructive, or based on factual data; often used in reference to positive statements in economics which describe the world as it is, rather than how it should be.

Good Y

A general term used to represent a specific product or commodity in economic models or discussions.