A Division Earning a Profit Will Increase Its Return on Investment

question 69

Multiple Choice

A division earning a profit will increase its return on investment (ROI) if it increases operating expenses and:

• A) sales by the same dollar amount.
• B) sales by the same percentage.
• C) investment by the same dollar amount.
• D) investment by the same percentage.

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Definitions:

Voting Shares

Equity securities that grant the holder the right to vote on company matters, such as board elections and major corporate decisions.

Net Income

The net income of a business once all costs and taxes are subtracted from its total revenues.

Fair Value Through Other Comprehensive Income

A financial accounting method where certain assets are revalued periodically and changes are recorded in other comprehensive income.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.