Return on investment is often expressed as follows: Required 1. What are the advantages of breaking down
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Required
1. What are the advantages of breaking down the computation into two separate components?
2. Fill in the following blanks:
After filling in the blanks, comment on the relative performance of these companies as thoroughly as the datapermit.
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Income Income Revenues Investment Revenues Investment Companies in Same Industry $00000 $200,000 $150,000 $250,000 Revenues Income Investment Income as a percentage of revenues Investment turnover ROI 60,000 $1,000,000 3% 2.0 6%
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1 The separate components highlight several features of return on investment not revealed by a single calculation a The importance of investment turnover as a key to income is stressed b The importanc...View the full answer
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Related Book For
Managerial Accounting Decision Making and Motivating Performance
ISBN: 978-0137024872
1st edition
Authors: Srikant M. Datar, Madhav V. Rajan
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