Question
Describe why reliance on Return on Investment for performance evaluation purposes can result in managers making sub-optimal decisions. Identify an alternative measure of financial performance
Describe why reliance on Return on Investment for performance evaluation purposes can result in managers making sub-optimal decisions. Identify an alternative measure of financial performance that is sometimes used as a tool to address this issue. Describe how this measure addresses the limitations associated with Return on Investment.
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Managerial Accounting
Authors: Carl S Warren, James M Reeve, Jonathan Duchac
12th Edition
1133952402, 978-1133952404
