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Asked by Elorah Stoner on May 22, 2024

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The use of return on investment (ROI)as a performance measure may lead managers to reject a project that would be favorable for the company as a whole.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit from the investment by its cost.

Performance Measure

A quantitative indicator used to evaluate the effectiveness or success of an organization, employee, or process in achieving objectives.

Company As Whole

Refers to considering an organization in its entirety, often in the context of evaluating overall performance or strategy.

  • Identify the implications of using ROI as a performance measure and its impact on managerial decisions.
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KC
Kassidy ChickMay 25, 2024
Final Answer :
True
Explanation :
ROI only considers the financial returns and does not take into account the overall benefits of a project such as market share or long-term growth potential. This may lead managers to reject projects with lower ROI even if they have high strategic value for the company.

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