If a company must decrease its selling price while all of the company's expenses remain constant, what will happen to return on investment (ROI)?
A)ROI will decrease.
B)ROI will increase.
C)ROI will not be affected.
D)We cannot determine the effect from the information provided.

Question

Quizplus · Accepted Answer

Decreasing the selling price will decrease the revenue generated, but the expenses will remain constant. This will result in a decrease in the profit margin, which will ultimately lower the ROI.

If a Company Must Decrease Its Selling Price While All