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

question 67

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 becomes hard to estimate ROI when 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.

---

Definitions:

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, leading to net profit or loss.

Balance Sheet

A financial statement summarizing a company's assets, liabilities, and shareholders' equity at a specific point in time.

Inventory Turnover

A measure of how quickly a company sells and replaces its stock of goods in a given period.

Cost of Goods Sold

Expenditures directly connected to the creation of a company's sold products, encompassing materials and labor expenses.