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True or False Financial measures such as ROI are generally worse than nonfinancial measures of key...

True or False

Financial measures such as ROI are generally worse than nonfinancial measures of key success drivers such as customer satisfaction as a leading indicators of future financial performance.

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Answer #1

True.

ROI = net income / average investment.

This is a measure which is based on historical figures and does not take into account qualitative factors of business growth, such as customer satisfaction, alternate uses of product, public perseption of the brand etc.

Qualitative factors as mentioned above will be helpful in determining the estimates of future financial performance, more effectively than the financial measures such as ROI etc.

A satisfied customer will be a returning customer and even the word of mouth publicity works in favor of the product which will help in having more revenue.

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