As discussed in the text, when calculating return on investment, how should a potential entrepreneur treat their salary?
A) Ignore it in the calculation as the entrepreneur keeps all of the net income anyway.
B) Include a reasonable amount as an expense if the entrepreneur plans to work at the business full-time
C) Add it to the perceived risk factor in the ROI calculation as it is one of the risks of being an entrepreneur
D) Use a profit sharing factor to keep the salary paid within reasonable limits
E) None of the answers apply.

Question

Quizplus · Accepted Answer

Including a reasonable salary as an expense is important because it reflects the true cost of running the business and provides a more accurate picture of profitability and return on investment.

As Discussed in the Text, When Calculating Return on Investment