The use of return on investment RO as a performance measure

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

Solution

Answer: True

Explanation:

Return on Investment (ROI) is a performance measure, used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI measures the amount of return on an investment, relative to the investment’s cost.

Because ROI is measured as a percentage, it can be easily compared with returns from other investments, allowing one to measure a variety of types of investments against one another.