Assuming all other things are equal, a company's ROI would decrease when
A)operating expenses increase.
B)operating income increases.
C)average operating assets decrease.
D)operating expenses decrease.

Question

Quizplus · Accepted Answer

ROI (Return on Investment) measures the effectiveness of a company's investment in generating profits. It is calculated by dividing the operating income by average operating assets. Therefore, if operating expenses increase, it will decrease the operating income, leading to a lower ROI. Conversely, if operating expenses decrease, it will increase the operating income, leading to a higher ROI. Similarly, if average operating assets decrease, it will increase the ROI, but if operating income increases, it will also increase the ROI.

Assuming All Other Things Are Equal, a Company's ROI Would