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ROI and Persuasive Arguments to see more possibilities

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ROI impacted by new investment generate a persuasive argument

You manage an investment center (evaluated based on the return on investment). Your production manager brings you a potential deal, a large piece of equipment that can help the company save money. The production manager explains to you that he doesn't think he can purchase the equipment because it will lower the unit's return on investment. What will be your persuasive argument to help the manager see more possibilities?

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Solution Summary

Your tutorial includes several arguments about how such a policy restricts growth and cash flows.

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While the new project may return an ROI lower than currently being enjoyed, the project would add total profits to the firm since it generates profits in excess of cost of capital. By ...

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Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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