Question 12
- Define the term Return on Investment (ROI).
- List three benefits of planning to a phone repair business.
Candidates that attempted this question did not perform well. This demonstrated lack of understanding of some business terms and the need for the business aspect of the course to be taught as well.
Observation
The expected answers are:
(a) Return on Investment (ROI) is a profitability measure that evaluates the performance of a business by dividing net profit by net worth
OR
A performance measure for evaluating the efficiency of an investment
(b) Benefits of planning to phone repair business
It
- helps to focus the direction of the business
- provides target that helps business to grow
- provides opportunity for reviews and assessment of goals
- provides logical structure to thinking about business
- is essential for raising funds from external sources
- helps to test the financial viability of the business idea