In Computing the Margin in a ROI Analysis,which of the Following

question 24

Multiple Choice

In computing the margin in a ROI analysis,which of the following is used?

• A)Sales in the denominator
• B)Net operating income in the denominator
• C)Average operating assets in the denominator
• D)Residual income in the denominator

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Definitions:

Lawn-Mowing Service

A business that provides the service of cutting the grass on residential or commercial properties.

Optimal Output

The level of production that maximizes a firm's profit, or the most efficient allocation of resources in producing a good or service.

Price to Clear

The price to clear is the market price at which the quantity supplied equals the quantity demanded, thereby clearing the market without leaving surplus or shortage.

Perfectly Competitive Industry

A Perfectly Competitive Industry is characterized by many sellers and buyers, free entry and exit, and a product that is identical across suppliers, leading to no single entity having market control.