Which of the Following Statements Does Not Represent a Limitation

question 42

Multiple Choice

Which of the following statements does not represent a limitation of using return on investment (ROI) for measuring and evaluating performance?

• A) ROI uses accounting income which is based on historical costs.
• B) ROI cannot be used to compare divisions of different sizes.
• C) ROI has the potential to create goal congruence problems.
• D) ROI fails to align some costs incurred in one period with the benefits received in another perioD.
• ROI can be used to compare different sized divisions-this is an advantage of ROI.

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Definitions:

Threat Of Extortion

The act of using threats or intimidation to compel someone to provide money, property, or favors against their will.

Undue Influence

A legal term describing a situation where an individual is able to persuade another's decisions due to the relationship between the two parties, often leading to unfair outcomes.

Duress Of Goods

A situation where goods are obtained or retained through coercion, or the wrongful collection of goods under pressure.

Ethical Policy

A set of guidelines that outlines the principles and values governing the behavior of individuals or organizations.