Question

Measurement issues when ROI is used to evaluate the relative performance of such units include ______.

Option 1: Inconsistent Capitalization Policies
Option 2: Varied Depreciation Methods
Option 3: Uniform Asset Valuation
Option 4: Standardized Revenue Recognition

Answer 1

The measurement issues when ROI is used to evaluate the relative performance of such units include inconsistent capitalization policies, varied depreciation methods, and standardized revenue recognition.

Step-by-step explanation:

The measurement issues when ROI is used to evaluate the relative performance of such units include inconsistent capitalization policies, varied depreciation methods, and standardized revenue recognition.

1. Inconsistent Capitalization Policies: Different units may have different policies for capitalizing expenses, which can affect the accuracy and comparability of ROI calculations.

2. Varied Depreciation Methods: Units may have different methods for depreciating assets, such as straight-line or accelerated methods, which can impact the calculation of ROI.

3. Standardized Revenue Recognition: Units may have different practices for recognizing revenue, such as recognizing it upfront or over time, which can affect the measurement of ROI.