Which of the following is consistent with an increase in a firm's return on investment?
A) costs increase more than revenues do
B) costs decrease less than revenues do
C) an increase in the asset level required to maintain current sales volume
D) an increase in sales revenue

Question

Quizplus · Accepted Answer

An increase in return on investment occurs when the amount of profit generated from an investment increases. A key driver of profit is sales revenue. Therefore, an increase in sales revenue is consistent with an increase in a firm's return on investment. Options A and C describe situations where costs are increasing, which would negatively impact profit and therefore return on investment. Option B describes a situation where revenues are increasing more than costs, which would increase profit and return on investment, but not to the same extent as an increase in sales revenue alone.

Which of the Following Is Consistent with an Increase in a Firm's