Which of the following actions will not increase the return on investment?
A) Increase sales
B) Decrease invested capital
C) Increase long-term liabilities
D) Decrease costs

Question

Quizplus · Accepted Answer

Increasing long-term liabilities does not directly increase the return on investment (ROI). ROI is typically calculated by dividing net profit by total invested capital. Increasing long-term liabilities may increase the capital available for investment or operations, but it does not inherently increase net profit or decrease the capital invested in a way that would improve ROI. Actions like increasing sales and decreasing costs directly improve net profit, while decreasing invested capital directly increases ROI by reducing the denominator in the ROI calculation.

Which of the Following Actions Will Not Increase the Return