Brookings Company evaluates its managers on the basis of return on investment. Division Three has a return on investment (ROI) of 15% while the company as a whole has an ROI of only 10%. Which of the following performance measures will motivate the manager of Division Three to accept a project earning a 12% return?
A. Residual income
B. Neither ROI nor residual income will motivate the manager to accept the project.
C. Both ROI and residual income will motivate the manager to accept the project.
D. ROI
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