None The return on investment measure of performance:Multiple ChoiceОis calculated by dividing average total assets for a period by the amount of net income for the period.Оis calculated using net income as the amount of return.Оrelates dividends paid to the company's average total assets.Оis never as important a measure of management effectiveness as the amount of net income.

Step 1:Formula of return on investment= (Net income/ total investment or cost of investment)*100…

Answered: The return on investment measure of…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 13MC: Which of the following measures the profitability of a division relative to the size of its...

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Similar questions

Return on Investment and Residual Income are Performance Measurements that both provide managers financial/accounting information in terms of percentages. TRUE FALSE
Return on net operating assets ( RNOA = NOPAT/Average NOA) is commonly used to evaluate a companies financial performance. If managers cannot increase NOPAT, they can still increase RNOA by reducing the amount of net operating assets (NOA). Listed below are four operating items that can be effectively managed to reduce operating assets, and/or increase RNOA: Inventories Accounts Receivable Plant, Property, and Equipment (fixed assets) Accounts Payable List and explain ONE action you would take, for EACH operating item above, to increase RNOA and/or reduce net operating assets (NOA). In your response, you should have ONE action item for EACH operating item listed.
The business risk of a company is most accurately measured by the company's: a. Debt-to-equity ratio b. Efficiency in using assets to generate sales c. Operating leverage and level of uncertainly about demand output prices and competition
A company that is seeking to increase return on investment should attempt to decrease: 1. sales 2.productive turnover 3.productiv assets 4. non productive assets
Which of the following statements is true? Return on investment (ROI) equals margin multiplied by sales. When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets. An advantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.
A responsibility center structure that considers investments made by the operating segments by using a common cost of capital percentage is called_______. A. return on investment B. residual income C. a profit center D. a discretionary cost center
What is the major shortcoming of using operating income as a performance measure for investment centers?
Which of the following measures the profitability of a division relative to the size of its investment in capital assets? A. residual Income (RI) B. sales margin C. return on investment (ROI) D. economic value added (EVA)
Which of the following is not a measure used by the financial perspective lens of the balanced scorecard? 9. Multiple Cholce Ask ROI Net operating Income EVA Residual Income
The business risk of a company is most accurately measured by the company's: a. Debt-to-equity ratio B. Efficiency in using assets to generate sales c. Operating leverage and level of uncertainty about demand, output prices and competition
Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratio
The following statements are true regarding the financial perspective EXCEPT:a. Financial performance can be improved through two basic approaches – revenuegrowth and productivity.b. Financial objectives typically relate to productivity.c. A financial measure might be net income.d. A financial objective might be to offer low process to satisfy and retain price-sensitivecustomers.

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