Question: Explain the potential problem that could arise from using ROI
Explain the potential problem that could arise from using ROI as the incentive measure for managers. What are some specific actions a company might take to resolve this potential problem?
Answer to relevant QuestionsExplain why companies decentralize. Describe some typical methods of decentralization. Refer to the Racer Sports Data Set. Compute each division’s EVA. Interpret your results. Racer Sports Data Set Racer Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line ...Benchmark, Home Hardware’s manufacturing division of lawn-mowing and snow blowing equipment, segments its business according to customer type: Professional and Residential. The following divisional information was ...Most decentralized subunits can be described as one of four types of responsibility centres. List the four most common types of responsibility centers and describe their responsibilities. Lin Ceramics, a division of Sesnie Corporation, has an operating income of $63,000 and total assets of $360,000. The required rate of return for the company is 13%. The company is evaluating whether it should use ROI or RI ...
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