The 'rate of return on investment' is classified as?
Correct answer: A. long-term shareholder value
- A. long-term shareholder value
- B. calculating stock value
- C. calculating return on investment
- D. calculating working capital
Explanation
The rate of return on investment is a financial performance measure used to assess the value created for shareholders over time. It is therefore associated with long-term shareholder value rather than merely the calculation of working capital or stock price.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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