Asked by Grace Hummel on May 22, 2024
Verified
For the past year, the turnover used in ROI calculations was:
A) 1.4
B) 3.3
C) 10.0
D) 3.0
Turnover
Refers to the total sales generated by a company during a specific period.
ROI
Return on Investment; a financial metric used to evaluate the efficiency of an investment or compare the efficiency of several investments.
- Calculate return on investment (ROI) and understand its implications.
Verified Answer
DW
Danielle WhiteMay 22, 2024
Final Answer :
D
Explanation :
We cannot determine the best choice based on the turnover alone. We need to know the profit or net income as well to calculate ROI. Therefore, the answer cannot be A, B, or C. Only choice D is a possible option.
Explanation :
Turnover = Sales ÷ Average operating assets
= $750,000 ÷ $250,000 = 3
= $750,000 ÷ $250,000 = 3
Learning Objectives
- Calculate return on investment (ROI) and understand its implications.