One of the Problems with ROMI Is That It Often

question 44

Multiple Choice

One of the problems with ROMI is that it often focuses on ________ rather than looking at the effects or changes in brand equity.

• A) long-term strategic goals
• B) short-term incremental profits and expenditures
• C) long-term relationship marketing goals
• D) short-term tactical perspective
• E) short-term target marketing goals

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Definitions:

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, amplifying both potential gains and losses.

Net Income

The total earnings of a company after subtracting all expenses from revenue, including taxes and interest.

Debt Financing

A method of raising capital through the sale of bonds, bills, or notes to individual and/or institutional investors, in return for lending the company money.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.