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 revenue of the division, which would increase the ROI if the costs remain constant. Increasing investment (A) would increase the denominator of the ROI equation, decreasing ROI if returns don't increase proportionately. Increasing costs (C) would decrease ROI by decreasing operating income. Decreasing operating income (D) would decrease ROI. Therefore, the best choice would be to increase sales.

The Manager of a Division Is Displeased with the ROI