Answer (B) is correct . Return on investment, that is, the amount of return generated for the parent firm per dollar of capital invested, is the simplest and generally the soundest measure of divisional performance.
Answer (A) is incorrect because While Division A’s actual return on investment most closely matched its target figure, it is still lower than Division B’s.
Answer (C) is incorrect because Division C only has the third best actual return on investment.
Answer (D) is incorrect because While Division D has the highest return on sales, it is actually the least profitable in terms of invested capital, as reflected by its low actual return on investment.
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