3) see pic **Educational Content on Return on Investment (ROI)**The concept of Return on Investment (ROI) is essential in financial and business analysis. ROI is calculated by assessing the profitability of an investment. It is expressed as a percentage and evaluated by the following formula:**ROI Formula:**ROI is computed by multiplying turnover by earnings as a percent of sales. **Components of ROI:**1. **Turnover**: Calculated as sales divided by total investment.2. **Total Investment**: Comprises current assets (inventory, accounts receivable, cash) plus fixed assets.3. **Earnings**: Equals sales minus the cost of sales.4. **Cost of Sales**: Includes variable production costs, selling expenses, freight and delivery, and administrative costs.**Tasks:**a. **Influence Diagram:** - You are to construct an influence diagram that demonstrates the relationships among these variables. There are options to choose an influence diagram from a list: - Click to view influence diagrams B, C, D, or A.b. **Mathematical Model:** - Develop a mathematical model using the following symbols: - E = Earnings - T = Turnover - S = Sales - C = Cost of Sales - TI = Total Investment - CA = Current Assets - FA = Fixed Assets - PC = Prod Costs - SC = Sales Expense - FE = Freight and Delivery - AC = Admin CostsThis exercise involves using dropdown menus to insert the appropriate financial variables into a mathematical model.By understanding and applying this model, one can effectively evaluate the efficiency and profitability of investments.

Return on investment (ROI) ratio compares the per $ earnings on every $ of total asset invested in…

11.1.11 Return on investment (ROI) is computed in the following manner ROI is equal to turnover multiplied by earnings as a percent of sales Turnover is sales divided by total investment Total investment is current assets (inventories, accounts receivable. and cash) plus fixed assets Earnings equal sales minus the cost of sales The cost of sales consists of variable production costs, selling expenses, freight and delivery, and administrative costs. Complete parts a and b a. Construct an influence diagram that relates these variables. Choose the correct diagram below Cirak huTO to view initence diagram B) Click here to view influence diagram C Click here to view influence diagram D. Click here to view influence diagram A. b. Develop a mathematical model using the symbols defined on the left E Earnings ROI = T Turnover T = VE S. Sales TI= C. Cost of Sales TI Total Investment CA. Current Assets FA Fixed Assets PC Prod Costs SC Sales Expense FC Freight and Delivery AC Admin Costs

11.1.11 Return on investment (ROI) is computed in the following manner ROI is equal to turnover multiplied by earnings as a percent of sales Turnover is sales divided by total investment Total investment is current assets (inventories, accounts receivable. and cash) plus fixed assets Earnings equal sales minus the cost of sales The cost of sales consists of variable production costs, selling expenses, freight and delivery, and administrative costs. Complete parts a and b a. Construct an influence diagram that relates these variables. Choose the correct diagram below Cirak huTO to view initence diagram B) Click here to view influence diagram C Click here to view influence diagram D. Click here to view influence diagram A. b. Develop a mathematical model using the symbols defined on the left E Earnings ROI = T Turnover T = VE S. Sales TI= C. Cost of Sales TI Total Investment CA. Current Assets FA Fixed Assets PC Prod Costs SC Sales Expense FC Freight and Delivery AC Admin Costs

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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