When throughput increases with no change in operating expenses or inventory levels, then:
A) profit and return on investment will increase and cash flow will decrease.
B) profit will increase and return on investment and cash flow will decrease.
C) profit, return on investment and cash flow will increase.
D) profit and cash flow will increase and return on investment will decrease.

Question

Quizplus · Accepted Answer

When throughput increases without any change in operating expenses or inventory levels, it means that the company is able to produce more output with the same amount of input, resulting in increased productivity. This leads to an increase in profit, return on investment, and cash flow.

When Throughput Increases with No Change in Operating Expenses or Inventory