Target Return-On-Investment Pricing Refers to

question 175

Multiple Choice

Target return-on-investment pricing refers to

• A) setting a price to achieve an annual target ROA.
• B) adding a fixed percentage to the cost of all items in a specific product class.
• C) setting prices to achieve a profit that is a specified percentage of the sales volume.
• D) setting a price to achieve an annual target ROI.
• E) setting a price based on an annual specific dollar target volume of profit.

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Definitions:

Fixed Asset Turnover Rate

A ratio that measures how efficiently a company uses its fixed assets to generate sales.

Total Asset Turnover Rate

A financial ratio that measures the efficiency of a company's use of its assets to generate sales, calculated as sales divided by total assets.

Net Fixed Assets

The value of a company's fixed assets minus depreciation, representing the actual usable value of physical assets.

Price-Earnings Ratio

The Price-Earnings Ratio (P/E ratio) is a financial metric that measures a company's current share price relative to its per-share earnings, used to evaluate its value.