Final answer:
The correct formula for return on investment (ROI) is operating income divided by operating assets or net income divided by average operating assets. None of the given options perfectly matches the ROI formula, with option c being the closest. Students must confirm the choices provided in the context of their coursework.
Step-by-step explanation:
Return on investment (ROI) is a measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments. ROI is calculated by dividing the benefit (or return) of an investment by the cost of the investment. The formula for return on investment is operating income divided by operating assets, which can also be expressed as net income divided by average operating assets.
The option provided in the question doesn't directly fit the standard ROI formula, but if we take the provided options, the closest (though still incorrect) to representing ROI based on standard accounting principles would be 'operating income divided by sales' multiplied by 'sales divided by operating assets' (option c).
However, it is key to note that typically, ROI is expressed as:
- ROI = (Net Income / Cost of Investment) x 100
This fundamental formula provides a percentage that indicates the profitability or efficiency of an investment. Students need to understand that while option c is close, none of the options perfectly match the standard ROI calculation, and should verify the accuracy of the choices given in the context of their coursework.