If sales and expenses both rise by $100,000
A)residual income will increase.
B)return on investment will increase.
C)return on investment will be unchanged.
D)asset turnover will decrease

Question

Quizplus · Accepted Answer

Return on investment (ROI) is calculated as net income divided by investment. If both sales and expenses increase by the same amount, net income remains unchanged, and thus the ROI remains unchanged as well, assuming the investment amount does not change.

If Sales and Expenses Both Rise by $100,000