The following information is available for the Peppercorn Company:

-A measure of income or profit divided by the investment required to obtain that income or profit is called

Question

The following information is available for the Peppercorn Company:
 
-A measure of income or profit divided by the investment required to obtain that income or profit is called

Quizplus · Accepted Answer

The measure described is commonly known as return on investment (ROI), which is calculated by dividing income or profit by the amount of investment. Option A, return on sales, is a measure of profitability that shows how much profit a business is earning per dollar of sales. Option B, capital turnover, is a measure of efficiency that shows how many times a company's total capital is used to generate sales. Option D, residual income, is the amount of income earned beyond the minimum required rate of return on a company's investments.

The Following Information Is Available for the Peppercorn Company