Chapter 12 - Investment Appraisals Flashcards
1
Q
Ads of ROI
A
- % easy to understand
- compare projects of different sizes
- doesn’t need cost of capital
2
Q
Disads of ROI
A
- Profit can be manipulated e.g. depreciation
- Historic
- Encourages short termism
- Dysfunctional behaviour
- discourages investment
- reject profitable investment
