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Performance measurement

UUsman6y ago
Dear sir Hi. Please help mw with the following questions: ROI may me misleading if we compare the departments ROI with the assets of different ages. This is true but how sir please explain me.
John MoffatJohn MoffatTutor6y ago#1
A department with older assets will have a lower value of net assets than a department with newer assets (because the assets will have been depreciated more). If the net assets are lower then the ROI will be higher, but it can therefore be misleading to compare.
UUsman6y ago#2
Oohhh.. Got it.. Thanks
John MoffatJohn MoffatTutor6y ago#3
You are welcome :-)
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