(Answered) Return on investmentroi is computed in the following manner

Management Studies

Return on investment(ROI) is computed in the following manner: ROI is equal to turnover multiplied by earnings as a percent of sales. Turnover is sales divided by total investment. Total investment is current assets plus fixed assets. Earnings equal sales minus the cost of sales. The cost of sales consists of variable production costs, selling expenses, freight and delivery, and administrative costs.

a. Construct an influence diagram that relates these variables.

b. Define symbols and develop a mathematical model.

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