If a Division Is Evaluated Using Return on Investment (ROI)

question 117

Multiple Choice

If a division is evaluated using return on investment (ROI) without regard to how assets are financed, the denominator in the ROI calculation will be:

• A) current assets.
• B) working capital.
• C) total assets available.
• D) total assets employed.

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Definitions:

Supply

The aggregate availability of a product or service for acquisition at a designated price.

Competition

A market situation in which multiple sellers are trying to sell their product or service to the same buyers, leading to a struggle for market share.

Industry

A group of companies that operate in a specific sector of the economy, manufacturing or supplying goods and services in a particular domain.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.