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Return on investment is often expressed as follows: InvestmentIncome=RevenuesIncomeInvestmentRevenues Requirements 1. What are the advantages of breaking down the computation into two separate components? 2. Fill in the blanks for the following table: (Click the icon to view the table.) After filling in the blanks, comment on the relative performance of these companies as thoroughly as the data permit. Data table Requirement 1. What are the advantages of breaking down the computation into two separate components? Select from the options below. a. b. c. d. The breakdown stresses the possibility of trading off investment turnover for income as a percentage of revenues. The breakdown stresses the possibility of trading off investment turnover for total assets as a percentage of investment. The importance of investment turnover as a key to income is stressed. The importance of required rate of return as a key to income is stressed. The importance of revenues is explicitly recognized. The importance of total assets is explicitly recognized. The important components are expressed as dollar figures instead of ratios or percentages. The important components are expressed as ratios or percentages instead of dollar figures. Requirement 2. Fill in the blanks for the following table: (Enter investment turnover to the nearest tenth, X.X.) \begin{tabular}{|c|c|c|c|c|} \hline & \multicolumn{4}{|c|}{ Companies in Same Industry } \\ \hline & & A & B & c \\ \hline Revenues & $ & 800,000$ & 600,000 & \\ \hline Income & $ & 80,000$ & 60,000 & \\ \hline Investment & $ & 400,000 & & 3,000,000 \\ \hline Income as a percentage of revenues & & % & % & 1.0% \\ \hline Investment turnover & & & & 2.0 \\ \hline ROI & & % & 2% & % \\ \hline \end{tabular} Now comment on the relative performance of these companies as thoroughly as the data permit. Income and investment alone shed light on comparative performances. Thus, we determine whether B's return on investment in comparison with A's is attributable to its investment or to its income. Company B does Company A in terms of income margin. Company B has a turnover of investment than does Company A. Company C's investment turnover is Company A's. Company C's income as a percentage of revenue is Company A's. Company B should emphasize increasing investment turnover by reducing or increasing Company C's management should concentrate on increasing its income as a percentage of revenues by increasing only its

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