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3 years ago

Question help using ________ may cause a manager to reject a project that may be profitable to the company as a whole

2 answers:

8 0

Using ROI may cause a manager to reject a project that may be profitable to the company as a whole. ROI stands for Return on Investment.

EXPLANATION

In absolute terms, a segment that has a large number of assets usually produces more than a segment that has a small number of assets. But this is not certain. Therefore, companies cannot use the absolute amount of revenue from a segment to compare the potential of different segments. To measure the effectiveness of a relative segment a company can use return on investment (ROI), which calculates returns (income) as a percentage of assets used (investment). Here is the formula for ROI:

ROI = Segment Income /Investment Base

For example, a segment that generates $5 million with an investment of $50 million has a ROI of 10% ($5 million / $50 million). Return on investment always reported as a percentage. Return on investment means how much income we make for each investment dollar we spend. In the example above ROI is 10%, this means the company makes 10 cents for every $1 investment.

By applying return on investment (ROI) it is expected that a manager is able to determine whether the segment is profitable or detrimental to the company. Because managers are responsible for income, financing, and investment-related to a segment/project. The manager will release investment opportunities that can provide more than enough ROI for the company as a whole, but which will provide lower ROI than the ROI that is already in the center, which will reduce the overall ROI of the center.

LEARN MORE

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

• The return on investment (ROI) from education is typically the highest for

brainly.com/question/1304876

KEYWORD: ROI, investment, company.

Subject: Business

Class: 10 - 12

Subchapter: ROI

mr Goodwill [35]3 years ago

7 0

The answer is <span>ROI
If the manager is evaluated based on Return on Investment, that manager will be very likely to reject every projeccts which return is below a certain departement standard no matter if that project is profitable for the company in the fear of being replaced by those who show better numbers.</span>

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Read 2 more answers

Last year Blease Inc had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $205,000 and its net i

Whitepunk [10]

Answer:

Had it cut costs and increased its net income by this amount, The ROE would have changed 11.64%.

Explanation:

Old Net profit margin = Net income/ Revenue

= $10,600/$205,000

= 5.170731707%

Old ROE = Net profit margin*Asset turnover*Equity multiplier

= 0.0517*1.33*1.75

= 12.03487805%

New net income = $10,600 + $10,250

= $20,850

New net profit margin = $20,850/$205,000

= 10.17073171%

New ROE = 0.1017*1.33*1.75

= 23.67237805%

Change in ROE = New ROE – Old ROE

= 23.67237805% - 12.03487805%

= 11.6375%

Therefore, Had it cut costs and increased its net income by this amount, The ROE would have changed 11.64%.

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3 years ago

Al invested $7,200 in an account that pays 4 percent simple interest. how much money will he have at the end of five years?

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3 years ago

Question help using​ ________ may cause a manager to reject a project that may be profitable to the company as a whole

Question help using ________ may cause a manager to reject a project that may be profitable to the company as a whole