How Will Increases in the Following Items Affect Return on Investment

question 35

Multiple Choice

How will increases in the following items affect return on investment (ROI) ?
$\begin{array} { l c c } & \text { Increase in Expenses } & \text { Increase in Inventury } \\\end{array}$
A) $\begin{array} { l c c } & \text { Decrease ROI } &&&& \text { Decrease ROI } \\\end{array}$
B) $\begin{array} { l c c } & \text { Decrease ROI } &&&& \text { Increase ROI } \\\end{array}$
C) $\begin{array} { l c c } & \text { Increase ROI } &&&& \text { Decrease ROI } \\\end{array}$
D) $\begin{array} { l c c } & \text { Increase ROI } &&&& \text { Increase ROI } \\\end{array}$

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Definitions:

Earnings

The amount of profit that a company produces during a specific period, typically reported as net income.

Capital Gain Yield

The aspect of the total gains from an investment that derives solely from its rise in price, without accounting for dividends or interest received.

Required Rate

The minimum return an investor expects to achieve on an investment.

Dividend Yield

A measurement comparing the yearly dividends issued by a business to its current market share price.