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23 September, 02:05

Which of the following formulas calculates the return on investment (ROI) ? a. Operating Income / Average Operating Assets b. Total Capital Employed / Operating Income c. Residual Income / Sales d. Operating Income / Minimum Expected Return e. After-tax Operating Income / Total Capital Employed

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Answers (2)
  1. 23 September, 02:30
    0
    A) Operating Income / Average Operating Assets

    Explanation:

    The ROI is generated by dividing the net return on investment by the cost of investment and multiplying by 100% or by subtracting the initial value of the investment from the final value of the investment and dividing this new number by the cost of the investment and multiplying it by 100%
  2. 23 September, 02:31
    0
    e. After-tax Operating Income / Total Capital Employed

    Explanation:

    Returns on investments (ROI) is a financial ratio that measures how much profit is generated for every $1 invested by a company.

    Mathematically, the formula for ROI

    = Net Profit / Total Investment * 100

    As such, where a net loss is made by a company, the ROI will be negative. The net income is the after-tax Operating Income while the total capital employed is equivalent to the total investment.
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Home » Business » Which of the following formulas calculates the return on investment (ROI) ? a. Operating Income / Average Operating Assets b. Total Capital Employed / Operating Income c. Residual Income / Sales d. Operating Income / Minimum Expected Return e.
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