💰 CPA Exam Prep

What does ROI (Return on Investment) measure?

A Revenue only
B The efficiency of an investment as a ratio of gain to cost
C Number of employees
D Market share

✓ Correct Answer: Option B

ROI = (Net Profit / Investment Cost) × 100%. It measures how efficiently an investment generates profit.

💡 Why is B) the correct answer?

The correct answer to the question "What does ROI (Return on Investment) measure?" is Option B: The efficiency of an investment as a ratio of gain to cost.

The other options — A) Revenue only, C) Number of employees, D) Market share — are incorrect for this CPA Exam Prep question. As explained above: ROI = (Net Profit / Investment Cost) × 100%. It measures how efficiently an investment generates profit.

📚 About This CPA Exam Prep Practice Question

This 1-level CPA Exam Prep question from the Business Environment (BEC) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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