Which of the Following Will Cause an Increase in ROI

question 81

Multiple Choice

Which of the following will cause an increase in ROI?

• A) An increase in variable costs
• B) An increase in average operating assets
• C) An increase in sales
• D) An increase in controllable fixed costs

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Definitions:

Operating Cycle

The duration between the initial investment in production and the generation of cash from the sale of the goods produced.

Total Asset Turnover

An efficiency metric indicating how well a company leverages its assets to generate revenue from sales.

Average Sale Period

The average time it takes for a business to convert its inventory into sales, indicating the efficiency of inventory management.

Debt-to-equity Ratio

Debt-to-equity Ratio is a financial metric that compares a company’s total liabilities to its shareholder equity.