Return on investment (ROI) is often expressed as follows: Required 1. What advantages are there in the
Question:
Return on investment (ROI) is often expressed as follows:
Required
1. What advantages are there in the breakdown of the computation into two separate components?
2. Fill in the following blanks:
After filling in the blanks, comment on the relative performance of these companies as thoroughly as the data permit.
Transcribed Image Text:
ncomeRnues InvestmentRevenues Investment Income Companies in Same Industry $200,000 $60,000 Revenues Income Investment Income as a percentage of revenues Investment turnover ROI $500,000 $ 150,000 $ 250,000 $1,000,000 3.0% 6%
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1 The separate components highlight several features of return on investment not revealed by a single calculation a The importance of investment turnover as a key to income is stressed b The importanc...View the full answer
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
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