Asked by Jincy Robin on Jun 21, 2024
Verified
A company's return on investment is the:
A) margin multiplied by turnover.
B) turnover multiplied by average operating assets.
C) turnover divided by average operating assets.
D) margin divided by turnover.
Variable Cost per Unit
The cost associated with producing one unit of a product, which varies with the level of production or sales volume.
Annual Fixed Costs
The total fixed costs a company incurs over a year, which do not vary with the level of production or sales.
Return on Investment
A measure of the profitability and efficiency of an investment, calculated by dividing net profits by the cost of the investment.
- Understand thoroughly the theory of return on investment (ROI) and the steps for its calculation.
Verified Answer
DL
daniela lopez herreraJun 24, 2024
Final Answer :
A
Explanation :
Return on Investment (ROI) is calculated as the product of margin (profit margin) and turnover (asset turnover). Margin represents how much profit is made on sales, and turnover indicates how efficiently assets are used to generate sales.
Learning Objectives
- Understand thoroughly the theory of return on investment (ROI) and the steps for its calculation.