The Purpose of Calculating the Potential Return on Investment in the Income

Multiple Choice

The purpose of calculating the potential return on investment in the income statement approach to opportunity assessment is to __________.

A) provide qualitative support for the new business venture
B) provide a basis for comparing the expected financial results to other investment opportunities
C) calculate how much initial investment will be required for the new venture
D) determine how much the owner may draw as salary in the first year of the business venture
E) None of the answers apply.