Which of the Following Can Increase a Company's Return on Investment

question 234

Multiple Choice

Which of the following can increase a company's return on investment?

• A) decrease in operating income
• B) decrease in total assets
• C) decrease in asset turnover ratio
• D) decrease in residual income

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Definitions:

Natural Monopoly

A market structure where a single supplier is most efficient due to the high fixed or startup costs of operating, making it impractical for new entrants to compete.

Returns to Scale

Describes how output changes in response to a proportional increase in all inputs in the production process; can be classified as increasing, constant, or decreasing.

Consumer Surplus

The gap between the aggregate amount consumers are willing to pay for a good or service and the sum they actually pay.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service relative to its market price, essentially the profit producers make.