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  • ROI Operating Income/ Investment Revenue - Expenses / Investment of 500000

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    xsnoweyx
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    The document discusses how to calculate return on investment (ROI) by dividing operating income, which is revenue minus expenses, by the total investment amount. It provides an example where a phone division earns $400 in revenue but incurs $250 in expenses, so its operating income is $150. This operating income determines how much the division can spend on circuit boards without losing money.

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    Notes 2.docx

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    The document discusses how to calculate return on investment (ROI) by dividing operating income, which is revenue minus expenses, by the total investment amount. It provides an example where a phone division earns $400 in revenue but incurs $250 in expenses, so its operating income is $150. This operating income determines how much the division can spend on circuit boards without losing money.

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    © All Rights Reserved
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    17 views8 pages

    ROI Operating Income/ Investment Revenue - Expenses / Investment of 500000

    Uploaded by

    xsnoweyx
    The document discusses how to calculate return on investment (ROI) by dividing operating income, which is revenue minus expenses, by the total investment amount. It provides an example where a phone division earns $400 in revenue but incurs $250 in expenses, so its operating income is $150. This operating income determines how much the division can spend on circuit boards without losing money.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 8

    ROI = Operating income/ investment = Revenue – expenses / investment of 500000

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    OPERATING INCOME = REVENUE – EXPENSES
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    Note: since phone division sells it for 400 and incurs 250 outlay cost, it only has 150 left to
    spend on circuit board. Will not pay above this or else losing money.

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