Using Ending Balances for the Investment Base in Computing Return

question 74

Multiple Choice

Using ending balances for the investment base in computing return on investment (ROI) might encourage managers to acquire assets:

• A) early in the year and dispose of assets late in the year.
• B) early in the year and dispose of assets early in the year.
• C) late in the year and dispose of assets late in the year.
• D) late in the year and dispose of assets early in the year.

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Definitions:

BCG Matrix

The BCG Matrix is a strategic business tool developed by the Boston Consulting Group to help organizations prioritize and manage their diverse product portfolio through categorization as stars, question marks, cash cows, or dogs based on market growth and market share.

Relative Market Share

A measure of a company's market share compared to its largest competitor, indicating competitiveness and market dominance.

Financial Projections

A bottom-line numerical estimate of the organization’s profitability.

Break-Even Analysis

An evaluation to determine the point at which the revenue from a product or service equals the costs, indicating that no profit or loss is made.