Answer (D) is correct . Each investment center of a business should be evaluated based upon return on investment to judge operating performance. ROI is comparable to calculations made both within and without a particular organization. Management may review the investment opportunities available within or without the firm. In essence, net income is stated as a proportion of investment capital (resources required).
Answer (A) is incorrect because Dollar sales do not give a measure of operating performance based on resources required.
Answer (B) is incorrect because Net income does not give a measure of operating performance based on resources required.
Answer (C) is incorrect because Profit percentages do not give a measure of operating performance based on resources required.
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