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Hi sir,
There was a question in the March exams related to ROI and RI of two divisions. There are two divisions A and B. The target ROI and RI are 20% and $50,000 respectively for both divisions irrespective of the size of investment and profits. After calculating, division A got an ROI of 25% and an RI less than 50,000. Division B got an RI of 500,000 and ROI of 30%.
Some statements were given to choose the correct two. I was confident in one out of the four and there were two confusing. They were,
1. Division B has a higher ROI than division A, therefore has outperformed division A.
2. Division B has a higher ROI than the target ROI, therefore outperformed division A.
Which of the above two could be correct?
Sorry, but I am not prepared to comment on the recent exam because I have not yet seen any of the questions.
My answer would be of no relevance anyway because it would not change your answer and will not make any difference to your mark.
What will be will be, so stop worrying about the exam 🙂
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