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Question 22 An advantage of ROI as a performance measure is that: it uses net sales to calculate the ratio. it is calculated

de 5 minutes to complete the exam. Each multiple choice question is worth 2 questions in total. Question 23 Which of the foll

- - 5 questions in total. Question 21 Which of the following statements is true regarding the use of divisional net income as

please help me with these 3 questions. thanks

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Answer #1

Solution 1:

An advantage of ROI as performance measure is that "It includes the use of asset to evaluate performance"

Hence last option is correct.

Solution 2:

Operating profit margin and asset turnover are the ratios that manager can use to break down ROI for improving performance.

Hence first option is correct.

Solution 3:

The true statement regarding use of divisional net income as performance measure is "It ignores the assets that produced the net income"

Hence 2nd option is correct.

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