Return on Investment (ROI)is a Very Popular Measure Employed to Evaluate

question 12

Multiple Choice

Return on investment (ROI) is a very popular measure employed to evaluate the performance of corporate segments because it incorporates all of the major ingredients of profitability (revenue,cost,investment) into a single measure.Under which one of the following combinations of actions regarding a segment's revenues,costs,and investment would a segment's ROI always increase? (CIA adapted) $$\begin{array} { | l | c | c | c | } \hline & \text { Sales } & \text { Equipment } & \text { Inrestment } \\\hline \text { A. } & \text { Increase } & \text { Decrease } & \text { Increase } \\\hline \text { B. } & \text { Decrease } & \text { Decrease } & \text { Decrease } \\\hline \text { C. } & \text { Increase } & \text { Increase } & \text { Increase } \\\hline \text { D. } & \text { Increase } & \text { Decrease } & \text { Decrease } \\\hline\end{array}$$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Accounts Payable

The amounts a company owes because it purchased goods or services on credit from a supplier or vendor.

Accounts Payable

amounts owed by a business to its suppliers or creditors for goods and services received but not yet paid for.

Exchange Rates

The rate at which one currency can be exchanged for another, influenced by market conditions, economic factors, and government policies.

Fluctuations

Variations or changes in value or level, often seen in financial markets, exchange rates, or pricing of commodities.