Which of the Following Is Not a Disadvantage of the ROI

question 49

Multiple Choice

Which of the following is not a disadvantage of the ROI performance measure?

• A) It encourages managers to focus on the long run rather than the short run.
• B) It discourages managers from investing in projects that would decrease divisional ROI but increase the profitability of the company as a whole.
• C) It encourages myopic behavior.
• D) All of these are disadvantages of the ROI measure.

Determine specialization and trade benefits in a two-party system.

Identify how specialization can lead to an increase in overall production and consumption.

Calculate the opportunity cost from given data and understand its implications.

Recognize the role of opportunity costs in determining comparative advantages.

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