Return on investment (ROI) Blank______.Multiple choice question.is calculated by dividing the average net income for two years by the average total assetsis normally calculated using net income as the measure of the returnis sometimes referred to as return on equity (ROE)is calculated by dividing net income earned during the year by the total assets at the end of the year
Question
Return on investment (ROI) Blank______.Multiple choice question.is calculated by dividing the average net income for two years by the average total assetsis normally calculated using net income as the measure of the returnis sometimes referred to as return on equity (ROE)is calculated by dividing net income earned during the year by the total assets at the end of the year
Solution
The correct answer is: "is normally calculated using net income as the measure of the return".
Here's why:
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"Return on investment (ROI) is calculated by dividing the average net income for two years by the average total assets" - This is not correct. ROI is typically calculated by dividing the net profit by the cost of the investment, not by the average total assets.
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"Return on investment (ROI) is normally calculated using net income as the measure of the return" - This is correct. ROI is calculated by dividing the net income (the return) by the cost of the investment.
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"Return on investment (ROI) is sometimes referred to as return on equity (ROE)" - This is not correct. ROI and ROE are different financial metrics. ROI measures the return on an investment relative to the cost of the investment, while ROE measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
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"Return on investment (ROI) is calculated by dividing net income earned during the year by the total assets at the end of the year" - This is not correct. This is actually the formula for Return on Assets (ROA), not ROI.
Similar Questions
Return on investment (ROI) is commonly expressed in each of the following ways, except Blank______.Multiple choice question.ROI = Net income / ((Beginning of year total assets + end of year total assets) / 2)ROI = Operating income / Average operating assetsROI = Net income / Average total assetsROI = Net income / Average stockholders' equity
Select all that applyWhich statements correctly describe return on investment (ROI)? (Choose every correct answer.)Multiple select question.It is sometimes referred to as return on assets (ROA).It is normally calculated using net income as the measure of the return.It is normally calculated using average total assets as the measure of the investment.It is calculated by dividing the average net income by the average total assets.It is calculated by dividing net income earned during the year by the total assets at the end of the year.
Return on investment = Blank______.Multiple choice question.Average operating assets ÷ Net operating incomeSegment revenue ÷ Net operating incomeNet operating income ÷ Average operating assetsNet operating income ÷ Segment revenue
Return on investment (ROI) is a measure of:a.Profitabilityb.Efficiencyc.Liquidity
ROI can be calculated as Blank______.Multiple select question.margin × turnoveraverage operating assets ÷ net operating incomenet operating income ÷ average operating assetsmargin ÷ turnover
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