Question

In smaller, new venture firms, returns are sometimes measured in terms of:

	a.	return on sales.
	b.	the amount and speed of growth.
	c.	return on assets.
	d.	return on equity.

Answer 1

The correct answer is B.

In smaller, new venture firms, returns are sometimes measured in terms of the amount and speed of growth.

The smaller new ventures takes time to grow, the new idea can take time to develop into a profit generating business, The initial investment done on the venture takes time to provide the return to the founders and investors. Hence the return on new ventures are measured in terms of amount and the speed of growth i.e the rate at which the profits are increasing instead of total returns on assets or equity.

Hope it explains!