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Sir using the same data as in previous question
Manager 2 wishes to use ROI as a performance measure
Which of the following is a valid reason for Willow co choosing to use ROI and not RI
a) Identifying controllable profits and investment can be difficult
b) RI attempts to measure divisional performance in a single figure
c) ROI ties in with NPV theoretically best way to make investment decisions
d) Manager 1 will show a higher RI because of size of division rather than superior managerial performanceSir correct ans is d) but can you please explain me that why it is correct and why others are wrong?
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