Which of the following will not change a company's return on investment?
A) An increase in the company's profit margin.
B) A decrease in the company's capital turnover.
C) An increase in the company's required rate of return.
D) A decrease in property, plant, and equipment.

Question

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as Net Income divided by the total investment (or assets) of the company. It measures how effectively a company is using its invested capital to generate profits. An increase in the company's required rate of return (C) does not directly affect the calculation of ROI, as it is more about the expectations of investors rather than a change in the actual performance or asset base of the company.

Which of the Following Will Not Change a Company's Return