Return on investment is often expressed as follows: Required 1. What are the advantages of breaking down

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Return on investment is often expressed as follows:

Required
1. What are the advantages of breaking down the computation into two separate components?
2. Fill in the following blanks:

Return on investment is often expressed as follows: .:.

After filling in the blanks, comment on the relative performance of these companies as thoroughly as the datapermit.

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Managerial Accounting Decision Making and Motivating Performance

ISBN: 978-0137024872

1st edition

Authors: Srikant M. Datar, Madhav V. Rajan

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Question Posted: Jan 15, 2015 05:00 AM

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Return on investment is often expressed as follows: Required 1. What are the advantages of breaking down

Question:

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%

Step by Step Answer:

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

Managerial Accounting Decision Making and Motivating Performance

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