Return on investment (ROI)is a term often used to express income earned on capital invested in a business unit.A division's ROI would increase if:

Question

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The formula for ROI is Net Income divided by Total Assets. Therefore, if sales remained the same and expenses were reduced by the same dollar amount that total assets increased, the division's net income would increase, resulting in a higher ROI. Option A is incorrect because an increase in expenses would decrease net income, thus decreasing ROI. Option C is incorrect because a decrease in sales would decrease net income, thus decreasing ROI. Option D is incorrect because an increase in both sales and expenses would not necessarily impact net income, and therefore ROI, unless the increase in sales was greater than the increase in expenses. Option E is incorrect because an increase in net profit margin would increase net income, but it would not necessarily impact total assets, which is a key component of the ROI calculation.

Return on Investment (ROI)is a Term Often Used to Express