The formula for calculating ROI is
A)Operating Income divided by average operating assets.
B)Segment margin divided by average operating assets.
C)Either operating Income divided by average operating assets or segment margin divided by average operating assets.
D)Neither operating Income divided by average operating assets nor segment margin divided by average operating assets.

Question

Quizplus · Accepted Answer

The formula for calculating ROI can be either operating income divided by average operating assets or segment margin divided by average operating assets. Both formulas provide the same result, which is the percentage of return on investment. Therefore, option C is the correct answer. Option A is incorrect because it does not include segment margin, and option B is incorrect because it only focuses on segment margin, not considering other operating expenses. Option D is incorrect because both operating income and segment margin are necessary to calculate ROI.

The Formula for Calculating ROI Is