A manager with a current ROI of 20% has been offered a project with a positive net present value and a simple rate of return of 17%. If the manager is evaluated based on ROI, the manager will probably Blank______ the project.

Question

Multiple choice question.

reject

accept

Answer 1

The manager will probably reject the project.

Since the project has a simple rate of return of 17%, which is lower than the current ROI of 20%, accepting the project would decrease the overall ROI. Thus, from the perspective of ROI evaluation, it would be beneficial for the manager to reject the project.