Answer (D) is correct . Each division within a firm should have an ROI based on the strategic goals of the firm consistent with its competitive environment.
Answer (A) is incorrect because Equal goals should not be set owing to differences in competitive environment, the strategic goals of the firm, and risk.
Answer (B) is incorrect because Using greater divisional ROIs in the less profitable divisions to motivate those divisions to achieve higher ROIs would not necessarily improve divisional performance.
Answer (C) is incorrect because Lower divisional ROIs in more profitable divisions in which motivation is unnecessary would likely suboptimize divisional performance.
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