When a marketing strategy increases profit contribution without increasing capital invested, the firm's return on investment also increases.

Question

Quizplus · Accepted Answer

When profit contribution increases without increasing capital invested, the return on investment (ROI) increases because the capital invested remains the same, while the profit contribution increases. This means that the ratio of profit to capital invested has increased, resulting in a higher ROI.

When a Marketing Strategy Increases Profit Contribution Without Increasing Capital