Why Is It a Challenging Task to Calculate a Project's

question 75

Multiple Choice

Why is it a challenging task to calculate a project's return on investment (ROI) ?

• A)It involves differentiating between the costs and savings, which are often hard to distinguish.
• B)Estimating ROI for projects that involve information systems involves specialized accounting knowledge.
• C)It is difficult to estimate ROI for projects where costs rise unexpectedly and revenue increases are hard to predict.
• D)When project costs remain stable throughout the duration of the project, they become hard to keep track of.

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Definitions:

Net Assets

The difference between a company's total assets and its total liabilities, representing the equity value that shareholders would theoretically receive if all assets were liquidated and all debts paid.

Investment Account

An account held at a financial institution and managed by an investment dealer that contains securities, cash, or other assets for investment purposes.

Book Value

The value of a company or asset as it appears on the balance sheet, calculated by subtracting liabilities from assets.

Fair Value

Fair value is the estimated price at which an asset could be bought or sold in a current transaction between willing parties, apart from in a liquidation sale.