Final answer:
The return on investment (ROI) is usually calculated using the total assets at the beginning of the period as the amount of investment. Early-stage investors, reinvesting profits, borrowing, and selling stock are methods for firms to raise financial capital for future profits, impacting ROI. Option 1.
Step-by-step explanation:
The return on investment (ROI) measure of performance is typically calculated using the amount of investment as the denominator. The amount invested can be many different things, but for your question, the relevant figure would be the total assets at the beginning of the period. This way of calculating ROI is used to assess the effectiveness of an investment and compare the efficiency of several different investments. Option 1.
Early-stage investors, reinvesting profits, borro^{-2}wing through banks or bonds, and selling stock are all ways that firms can raise the financial capital needed for projects that involve spending money in the present and expecting to earn profits in the future. When business owners choose from these sources of financial capital, they must also consider how they will pay them back. The selection of financial capital sources influences the potential ROI and the financial structure of the company.