Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year:
Refer to Global Electronics Company. If expenses increased by $20,000 in the Computer Division,
A) return on investment would decrease.
B) residual income would increase.
C) the target rate of return would decrease.
D) asset turnover would decrease.

Question

Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year:
 Refer to Global Electronics Company. If expenses increased by $20,000 in the Computer Division,
A) return on investment would decrease. 
B) residual income would increase. 
C) the target rate of return would decrease. 
D) asset turnover would decrease.

Quizplus · Accepted Answer

If expenses increase, net income will decrease, and as a result, the return on investment will decrease.

Global Electronics Company the Computer Division of Global Electronics Company