Question

Another major ____ of using ROI as a performance evaluation method is that it can be decomposed into two meaningful parts=_____ x ____.

Answer 1

The advantage of using ROI as a performance evaluation method is that it can be decomposed into profit margin and investment turnover.

Step-by-step explanation:

The major advantage of using ROI as a performance evaluation method is that it can be decomposed into two meaningful parts: profit margin and investment turnover.

Profit margin represents the percentage of profit obtained from each unit of sales or investment. It shows how efficiently a company is generating profit from its operations.

Investment turnover, on the other hand, indicates how effectively a company is utilizing its assets to generate revenue. It measures the amount of sales that can be generated from each unit of investment.