The Return on Investment Is Usually Considered the Most Popular

question 79

Multiple Choice

The return on investment is usually considered the most popular approach to measure performance because ________.

• A) it blends all the ingredients of profitability into a single percentage
• B) once determined, there is no need to use it with other measures of performance
• C) it throws light on the company's working capital
• D) it measures the cash balance of the company in the most efficient manner

Understand the calculation and significance of the margin of safety percentage.

Recognize the effect of sales mix shifts on the break-even point.

Understand the special case relationship between the break-even point formula and the formula to attain a target profit.

Understand how to compute budgeted changes in inventory levels.

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Definitions:

Marketing Channel

Necessary activities or processes for transferring the ownership of products from their place of manufacturing to their place of use.

Retailer-sponsored Cooperative

A group of retailers that collaborate to buy in bulk, thereby reducing costs and gaining marketing advantages.

Wholesale Facility

A location or establishment primarily engaged in selling goods in large quantities at reduced prices to retailers or other businesses, rather than to the general public.

Merchandising Programs

Strategies and practices that companies use to promote the sale of products in retail environments, which can include product placement, pricing strategies, and promotional activities.