The formula for calculating ROI is
A)segment margin divided by average operating assets.
B)segment margin divided by the internal rate of return.
C)the internal rate of return divided by average operating assets.
D)segment margin divided by assets minus liabilities.

Question

Quizplus · Accepted Answer

The formula for ROI (Return on Investment) is segment margin divided by average operating assets. This is because ROI reflects the profitability of an investment relative to the resources invested in it, and segment margin represents the income generated by a specific business segment, while average operating assets represents the amount of resources invested in that segment. Therefore, dividing segment margin by average operating assets provides a ratio that reflects how efficiently the segment is using its resources to generate income.

The Formula for Calculating ROI Is