Which of the following is true concerning the ROI performance measure?
A) ROI is based on cash flow.
B) Is also called the accounting rate of return.
C) Some companies use net assets (assets minus liabilities) as the numerator.
D) The usual formulation is [total assets/ income ].
E) Net assets are sometimes used as the denominator, and net assets are sometimes used as the numerator.

Question

Quizplus · Accepted Answer

ROI is often referred to as the accounting rate of return because it measures the profitability of an investment relative to its cost using accounting information.

Which of the Following Is True Concerning the ROI Performance