Return on investment (ROI)is a term most often used to express income earned on assets invested in a business unit.A company's return on investment would increase if sales
A)increased by the same dollar amount as expenses and total assets increased.
B)remained the same and expenses were reduced by the same dollar amount that total assets increased.
C)decreased by the same dollar amount that expenses increased.
D)and expenses increased by the same percentage that total assets increaseD.

Question

Quizplus · Accepted Answer

Return on investment (ROI) is calculated by dividing the net income by the total assets. If sales remain the same and expenses are reduced, the net income increases. If this increase in net income happens without a proportional increase in total assets (or in this case, an increase in assets is offset by the same amount of expense reduction), the ROI would increase because the numerator (net income) increases while the denominator (total assets) remains effectively unchanged in terms of its impact on ROI.

Return on Investment (ROI)is a Term Most Often Used to Express