Which of the following statements best defines return on investment?
a. It is the margin of profit earned by a firm inclusive of the taxes payable by the firm.
b. It is a firm's net profits after taxes divided by total assets.
c. It is the price charged to customers multiplied by the number of units sold.
d. It is the percentage of increase in sales achieved by increasing production costs.
Answer: b. It is a firm's net profits after taxes divided by total assets.