The formula for calculating ROI is
A)Segment margin divided by internal rate of return.
B)Internal rate of return divided by average operating assets.
C)Operating income divided by average operating assets.
D)None of these answer choices are correct.

Question

Quizplus · Accepted Answer

ROI (Return on Investment) is a profitability metric that measures how efficiently a company is using its resources to generate profit. The formula to calculate ROI is operating income (or profit) divided by average operating assets. Therefore, option C is the correct choice. Option A is incorrect because segment margin is not used in the calculation of ROI. Option B is incorrect because internal rate of return is not a component of the formula for ROI. Option D is incorrect because there is a correct answer choice for the formula to calculate ROI.

The Formula for Calculating ROI Is