The manager of a division is displeased with the ROI of the division.One step that would increase ROI (holding everything else constant)is
A)increasing investment.
B)increasing sales.
C)increasing costs.
D)decreasing operating income.
E)none of these.

Question

Quizplus · Accepted Answer

Increasing sales would increase the numerator in the ROI equation (Operating income/Investment), while holding the denominator constant. Therefore, ROI would increase. Increasing investment (choice A) or increasing costs (choice C) would decrease ROI, and decreasing operating income (choice D) would have a negative impact on ROI. None of these options would result in an increase in ROI except for choice B.

The Manager of a Division Is Displeased with the ROI