A company earning a profit can increase its return on investment by:

Question

Quizplus · Accepted Answer

Increasing sales revenues and operating expenses by the same percentage is the best choice as it allows the company to maintain its profit margin while generating more revenue. This leads to an increase in return on investment as the company's earnings grow without compromising its profitability. Option A is not optimal as increasing expenses as well as revenue by the same dollar amount may not lead to a meaningful increase in profits. Option B is not optimal as decreasing sales revenues can negatively impact the company's profit margin. Option C is not ideal as increasing investment without a corresponding increase in revenue can lead to a decrease in return on investment. Option E is not the best choice as reducing both investment and sales by the same percentage may not have a significant impact on the company's profitability.

A Company Earning a Profit Can Increase Its Return on Investment