Welcome to Westonci.ca, where your questions are met with accurate answers from a community of experts and enthusiasts. Our platform offers a seamless experience for finding reliable answers from a network of experienced professionals. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.
Sagot :
To determine the correct formula for calculating the return on investment (ROI), let's analyze each of the provided options:
1. Cash flow: This represents the amount of cash that is generated and can be used for investment, expenses, or savings. When calculating ROI, it is the return or profit from the investment.
2. Effective operating income: This refers to the income from operations after accounting for expenses such as cost of goods sold, operating expenses, and depreciation. It is not typically used directly to calculate ROI.
3. Gross operating income: This is the income from operations before accounting for operating expenses and depreciation. It also is not directly used in ROI calculations.
4. Principal payment and interest: These are payments made to reduce a loan's principal balance or to pay interest on a loan. They are not used in calculating ROI.
Based on this analysis, the correct element used in the formula for calculating ROI is:
Cash flow divided by the initial cash investment.
Therefore, the correct answer is:
Cash flow
1. Cash flow: This represents the amount of cash that is generated and can be used for investment, expenses, or savings. When calculating ROI, it is the return or profit from the investment.
2. Effective operating income: This refers to the income from operations after accounting for expenses such as cost of goods sold, operating expenses, and depreciation. It is not typically used directly to calculate ROI.
3. Gross operating income: This is the income from operations before accounting for operating expenses and depreciation. It also is not directly used in ROI calculations.
4. Principal payment and interest: These are payments made to reduce a loan's principal balance or to pay interest on a loan. They are not used in calculating ROI.
Based on this analysis, the correct element used in the formula for calculating ROI is:
Cash flow divided by the initial cash investment.
Therefore, the correct answer is:
Cash flow
Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.