Page 976 - Accounting Principles (A Business Perspective)

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ROI=.05×2
ROI = 10 per cent
d. All of these should be used to evaluate managerial performance.

c.
Segment 1 Segment 2 Segment 3
Income $ 180,000 $ 1,000,000 $ 500,000
Investment 2,000,000 5,000,000 2,000,000
ROI 9% 20% 25%
Desired minimum
ROI (10%) 200,000 500,000 200,000
RI $ (20,000) $ 500,000 $ 300,000
Consider dropping Segment 1.

Accounting Principles: A Business Perspective 977 A Global Text