ROI Is Theoretically Flawed Because It Divides Profit Return by the Expenditure

question 6

True/False

ROI is theoretically flawed because it divides profit return by the expenditure instead of
subtracting it.

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Definitions:

Interest Tax Shield

The tax savings achieved by deducting payable interest on debt from taxable income, thereby reducing the overall tax expense.

Deductibility

Deductibility refers to the eligibility of an expense to be subtracted from gross income to reduce taxable income, under tax regulations.

Tax Savings

Reductions in tax payments achievable through various deductions, credits, or allowances.