Question detail
RiverRun Catering serves online shoppers while training staff; the case evidence includes customer retention of ?5,356, sales of 771 units, and a 21% change in costs or demand. Which option best applies Calculate average rate of return for business investment projects?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Financial terms and calculations
Question
- A. Use investment, average rate of return to judge net profit margin, customers impact, and the business objective in Average rate of return.
- B. Give only a definition of Financial terms and calculations without using the case evidence.
- C. Treat cash flow and profit as identical and ignore the effect on customers.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use investment, average rate of return to judge net profit margin, customers impact, and the business objective in Average rate of return.
Explanation
Choose this response because Use investment, average rate of return to judge net profit margin, customers impact, and the business objective in Average rate of return. The case evidence gives ?6,856, 771 units, and 21%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse cash flow and profit, miss the customers, or ignore the business objective.
Common mistake
Average rate of return common mistake 1
Giving a vague answer instead of directly addressing: Calculate average rate of return for business investment projects..
Answer by clearly explaining how to calculate average rate of return for business investment projects..
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