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Akimi4 [234]
3 years ago
11

A firm always has a competitive disadvantage when its return on invested capital is:_________

Business
1 answer:
Brilliant_brown [7]3 years ago
4 0

Answer:

A firm always has a competitive disadvantage when its return on invested capital is:_________

D. below the industry average.

Explanation:

A firm's competitive disadvantage shows when the return on investment is below the industry average.  For instance, let us assume that Niposte, Inc. operates in the paper milling industry and that its return on investment of 10% falls below the industry average of 15%, then one can conclude that Niposte, Inc. is not favored in this industry.   The cause of such a situation for Niposte, Inc. may be that the ability of its management to turn revenue into profits for stockholders is hampered with excessive costs.  This is because the return on investment is a profitability ratio that shows how Niposte, Inc. and its competitors are performing in terms of generating profit from revenue through efficient management of operating costs.

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Answer

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