Division C of the CCC Group is considering a project which will increase annual profit by $45,000, but will require average inventory levels to increase by $180,000. The current return on investment for the division is 26%, and the imputed interest cost of capital is 20%. Would the performance measures of ROI and RI motivate the manager of Division C to act in the interest of the company as a whole?

Answer rating: 100% (QA)

No the performance measures of ROI and RI alone would not necessarily motivate the manager of Divisi... View the full answer