Question: Evaluate whether each statement is true or false. Return on investment (ROI) is criticized as a performance measure because it does not balance long and

Evaluate whether each statement is true or false.

Return on investment (ROI) is criticized as a performance measure because it does not balance long and short term issues.

Residual income may lead a manager to forgo investments that could benefit the company as a whole.

Delayed investment in new property, plant, and equipment generally makes achievement of ROI targets easier.

The various performance measures in a balanced scorecard should be linked together on a cause-and-effect basis to further refine the overall strategy.

The primary disadvantage of using ROI rather than RI to evaluate performance is that ROI does not reflect all economic gains.

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