Asked by Emily Maniccia on May 14, 2024

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Return on investment can be split into which of the following two measures?

A) Investment center income and profit margin.
B) Profit margin and net income.
C) Investment center average assets and investment turnover.
D) Residual income and operating income.
E) Profit margin and investment turnover.

Investment Turnover

Investment turnover measures how efficiently a company generates sales from its investment in fixed assets.

Profit Margin

The percentage of revenue remaining after all expenses, taxes, and costs have been deducted from total sales.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit by the cost of the investment.

  • Acquire knowledge of the essential performance measurements for investment centers, including profit margin, investment turnover, and return on investment.
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LW
Lindsey WeavilMay 19, 2024
Final Answer :
E
Explanation :
Return on investment can be split into two measures, namely profit margin and investment turnover. Profit margin measures how much profit a company generates from each dollar in revenue, while investment turnover measures how efficiently a company generates sales from its investments. Together, these measures enable investors to evaluate a company's profitability and efficiency in generating returns on its investments. Therefore, option E is the best choice.