Question

ROI can be calculated as:

a. average operating assets divided by net operating income
b. net operating income divided by average operating assets
c. margin multiplied by turnover
d. margin divided by turnover

Answer 1

Correct option is (b)

Step-by-step explanation:

Return on investment or ROI measures the efficiency of investments by estimating the amount of net income generated from average assets of the company. Formula to compute ROI:

ROI =
`(Net\ operating\ income)/(Average\ operating\ assets) * 100`

The better the ROI, the more efficient would be the company's investments.