Mari Inc.'s managers are considering alternative strategies to see if it is possible to improve ROI from that originally budgeted for the coming year.Alternative 1 has more money spent on advertising to increase sales while alternative 2 includes reductions of a number of operating expenses.Adjustments to operating assets are anticipated in each of the two alternatives as well.The numbers as in the original budget and in the two alternatives are set out below: What is the relative ranking based upon ROI of the above three choices (highest to lowest)?

Question

Mari Inc.'s managers are considering alternative strategies to see if it is possible to improve ROI from that originally budgeted for the coming year.Alternative 1 has more money spent on advertising to increase sales while alternative 2 includes reductions of a number of operating expenses.Adjustments to operating assets are anticipated in each of the two alternatives as well.The numbers as in the original budget and in the two alternatives are set out below:  What is the relative ranking based upon ROI of the above three choices (highest to lowest)?

Quizplus · Accepted Answer

Based on the ROI calculations, Alternative 2 has the highest ROI, followed by the Original Budget and then Alternative 1. Therefore, the best choice would be to go with Alternative 2. This option reduces operating expenses and adjusts operating assets to increase ROI without increasing advertising expenses.

Mari Inc'S Managers Are Considering Alternative Strategies to See If It