Business FinancesQuestion 1187 of 1605
Return on the owner's investment is improved when a contractor:
a.Lowers prices below cost to win volume
b.Increases net profit while controlling the assets and capital employed
c.Withholds payroll taxes for personal use
d.Ignores job-cost records
Explanation
Profitability improves when the business earns more net profit relative to the capital invested. Efficient use of assets and healthy margins raise the owner's return; cutting prices below cost or mismanaging funds destroys it.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)