Question
Return on investment (ROI) is often expressed as follows: Income / investment = Income / Revenues Revenues / Investment Requirement 1. What advantages are there
Return on investment (ROI) is often expressed as follows:
Income / investment = Income / Revenues Revenues / Investment
Requirement 1. What advantages are there in the breakdown of the computation into two separate components? Select from the options below. (Complete all input fields.)
a. | The importance of investment turnover as a key to income is stressed. |
b. | The importance of revenues is explicitly recognized. |
c. | The important components are expressed as ratios or percentages instead of dollar figures. |
d. | The breakdown stresses the possibility of trading off investment turnover for income as a percentage of revenues. |
Requirement 2. Fill in the blanks for the following table: (Enter investment turnover to the nearest tenth, X.X.)
| Companies in Same Industry | |||||
| Company A | Company B | Company C | |||
---|---|---|---|---|---|---|
Revenues | $1, 600,000 | $1, 300,000 | $? | |||
Income | $96,000 | $78,000 | $? | |||
Investment | $800,000 | $? | $260,000 | |||
Income as a percentage of revenues | ? | % | ? | % | 1.5 | % |
Investment turnover | ? | ? | 2 | |||
ROI | ? | % | 3 | % | ? | % |
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