A. Return on investment 1. Cost of goods sold/average inventory 2.. Sales/averag
ID: 2486084 • Letter: A
Question
A. Return on investment
1. Cost of goods sold/average inventory
2.. Sales/average total sales
3. Net operating income-average operating assets
4. Cost that has been incurred and cannot be avoided regardless of what a manager decides to do.
5. Used to rank competing investments
6. The rate of return promised by an investment over its useful life
7. Has control over cost bu tnot over revenue or use of investment funds
8. =net operating income that an investment center earns above the minimum required return on its operating assets
9. includes cash, A/R, inventort, plant and equipment and other operating assets.
10. are also referred to as relevant cost and avoidable cost
11. time required to turn raw materials into completed products
12. current assets-current liabilities
13. is the potential beenfit given up when one alternative is selected over another
14. =net operating income/average operating assets
15. focuses on cash flow, it does not recognize the time value of money
Which number matches with A.
Explanation / Answer
Return on investment=net operating income/average operating assets