Why Is Return on Investment (ROI) the Most Commonly Used

question 80

Multiple Choice

Why is return on investment (ROI) the most commonly used financial performance measure?

• A)It measures how far profits can decline before managers cannot meet interest changes.
• B)It measures how efficiently managers are collecting revenues from customers to pay expenses.
• C)It shows whether organizations can pay claims of short-term creditors without selling inventory.
• D)It measures how efficiently managers are turning inventory over.
• E)It allows managers of one organization to compare performance with that of other organizations.

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Definitions:

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