Which strategy would increase return on investment (ROI)? (hint: it may help to refer to the ROI formula) O A

Accounting Dec 01, 2020

Which strategy would increase return on investment (ROI)? (hint: it may help to refer to the ROI formula) O A. Decreasing operating expenses B. Increase operating assets OC. Decreasing operating income OD. Reducing sales

Expert Solution

A. Decreasing Operating Expenses

Reason:

ROI = Net income / Total Investment

In order to increase ROI, either Net Income should be increased or Total investment should be decreased.

Decreasing Operating Expenses will lead to increase in Net income. This will increase ROI.

Increasing operating assets, Decreasing operating income, Reducing sales will decrease ROI.

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