The accounting return on investment technique reveals how many dollars in average profits are generated per dollar of investment.

Question

Quizplus · Accepted Answer

The accounting return on investment (ROI) technique measures the profitability of an investment by dividing the average net profits by the investment cost. The resulting ratio shows how many dollars of profit are earned per dollar of investment, so it is a measure of the efficiency or effectiveness of the investment.

The Accounting Return on Investment Technique Reveals How Many Dollars