Beta Division had the following information: If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta Division will be
A) 100.0%.
B) 16.7%.
C) 600.0%.
D) 62.5%.

Question

Beta Division had the following information:  If the asset base is decreased by $100,000, with no other changes, the return on investment of Beta Division will be
A) 100.0%. 
B) 16.7%. 
C) 600.0%. 
D) 62.5%.

Quizplus · Accepted Answer

There is not enough information given in the provided string of characters to calculate the actual return on investment for Beta Division. However, we can use the formula for return on investment (ROI) to determine how a decrease in asset base will impact it:

ROI = (Net Income / Total Assets) x 100%

Assuming no change in Net Income, a decrease in Total Assets by $100,000 would result in a lower denominator, leading to a higher ratio and therefore a higher ROI. Using the given information, the ROI before the decrease is 16.7% (TB2043_00). Therefore, the best choice is B, 16.7%.

Beta Division Had the Following Information: If the Asset