Which of the following formulas is used to calculate the rate of

return on investment?

a.Rate of return on investment = Invested assets / Sales

b.Rate of return on investment = Estimated average annual income / Sales

c.Rate of return on investment = Operating income / Invested assets

d.Rate of return on investment = Initial cost outlays / Invested assets

Lilac Co. provided the following information:

Profit Margin Investment Turnover

Division A 10% 1.5

Division B 15% 0.6

Which division is the most profitable per dollar invested?

a.Division B is more profitable because it has a higher profit margin than that of Division A.

b.Division B is more profitable because it has a lower investment turnover than that of Division A.

c.Division A is more profitable because it has a higher investment turnover than that of Division B.

d.Division A is more profitable because it has a lower profit margin than that of Division B.

Which of the following is true of a balanced scorecard?

a.It is a set of multiple performance metrics for a company that include metrics in addition to traditional financial metrics.

b.It is the method used to encourage the duplication of assets and expenses across divisions.

c.It is the process of delegating authority to managers closest to the operations.

d.It aims at promoting price war between different divisions of a company.