In return on investment calculations,we should measure invested capital ________ because ________.
A) at the end of the period; it is easiest
B) at the end of the period; income is measured at the end of the period
C) at the beginning of the period; it is a lead indicator
D) as an average for the period under review; income is measured over a period of time

Question

Quizplus · Accepted Answer

Invested capital should be measured as an average for the period under review because ROI is a measure of profitability over a period of time, and income is also measured over that same period of time. Measuring invested capital at the beginning or end of the period could skew the results and not accurately reflect the true ROI.

In Return on Investment Calculations,we Should Measure Invested Capital ________