Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Transcribed Image Text:How is a company's return on investment calculated?
Select one:
a. By multiplying the margin by the turnover.
b. By dividing the turnover by the average operating
assets.
c. By dividing the margin by the turnover.
О
О
d. By multiplying the turnover by the average
operating assets.
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- The following are investment criteria: net present value, payback, profitability index, average accounting return, and the internal rate of return. Question: Which one of these is the most valuable from a financial point of view, and why? (Answer the question correctly and in-depth.)arrow_forwardWhich of the following is NOT a profitability ratio? Select one:a. Return on Equityb. Net Profit Marginc. Return on Assetsd. Average Collection Periodarrow_forwardIn the DuPont system, the return on total assets (asset) is equal to (return on equity) × (financial leverage multiplier). (net profit margin) × (fixed asset turnover). (return on equity) × (total asset turnover). (net profit margin) × (total asset turnover).arrow_forward
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