COST ACCOUNTING
RESPONSIBILITY ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Formula for Return on Investment (ROI) is
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sales margin x operating asset
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sales margin x capital turnover
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sales margin x sales revenue
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sales margin x net income
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Explanation:
Detailed explanation-1: -ROI (return on investment) equals sales margins divided by the firm’s capital turnover ratio. This equation requires first finding the sales margin and then the capital turnover ratio; then dividing the former by the latter.
Detailed explanation-2: -A calculation of the monetary value of an investment versus its cost. The ROI formula is: (profit minus cost) / cost.
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