BUSINESS-ENVIRONMENT-AND-CONCEPTS Web TestEngine demo

When the average age of assets differs substantially across segments of a business, the use of ROI may not be appropriate.

ROI relies on financial measures that are capable of being independently verified while other forms of performance measures are subject to manipulation.

The use of ROI may lead managers to reject capital investment projects that can be justified by using
discounted cash flow models.

The use of ROI can make it undesirable for a skillful manager to take on trouble-shooting assignments such as those involving turning around unprofitable divisions.