State whether following statement is true or false :ROI is calculated

1.	State whether following statement is true or false :ROI is calculated on ownership capital only.OptionsTrueFalse
Answer» False Explanation: ROI, i.e. return on investment, is calculated on total capital employed which is total of ownership capital and debt capital. Capital Employed = Share Capital + Reserves & Surplus + Long-Term Loans + Debentures – Preliminary Expenses Alternatively, Capital Employed = Net Fixed Assets + Long-Term Investments + Working Capital.

State whether following statement is true or false :ROI is calculated on ownership capital only.OptionsTrueFalse

Answer»

False

Explanation: ROI, i.e. return on investment, is calculated on total capital employed which is total of ownership capital and debt capital.

Capital Employed = Share Capital + Reserves & Surplus + Long-Term Loans + Debentures – Preliminary Expenses Alternatively,

Capital Employed = Net Fixed Assets + Long-Term Investments + Working Capital.