Which of the Following Statements About Return on Investment (ROI)is

question 96

Multiple Choice

Which of the following statements about return on investment (ROI) is false?

• A) ROI equals margin divided by investment turnover.
• B) ROI is used to measure the performance of investment centers.
• C) Seeking to maximize ROI can result in a conflict between the interest of a particular manager and the interest of the business as a whole.
• D) Companies may minimize motivational problems by using original cost instead of book value in the denominator of the ROI formula.

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Definitions:

Demand Characteristics

Cues in an experiment that suggest to participants what behavior is expected of them.

Falsifiability

The capability of a hypothesis or theory to be proven false, a critical principle for scientific validity.

Parsimony

In science and philosophy, the principle that the simplest explanation of an event or observation is preferred over a more complex explanation.

Demand Characteristics

Demand characteristics refer to subtle cues or signals in a study that communicate to participants how they are expected to behave.