Howe Company Increased Its ROI from 20% to 25

question 99

Multiple Choice

Howe Company increased its ROI from 20% to 25%. Net operating income and sales remained at their previous levels of $40,000 and $1,000,000 respectively. The increase in ROI was attributed to a reduction in operating assets brought about by the sale of obsolete inventory at cost (the proceeds from the sale were used to reduce bank loans) . By how much was inventory reduced?

• A) $8,000
• B) $40,000
• C) $10,000
• D) it is impossible to determine from the data given.

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Definitions:

Norms

Standards or patterns of behavior that are typical or expected within a group or society.

Low-context Cultures

Cultures in which communication is explicit, and meaning is expressed directly through words.

Direct Approaches

Tactics or methods that deal with problems or situations in a straightforward and clear manner.

Indirectness

The quality of not addressing an issue or matter in a straightforward or direct way, often used to soften communication or avoid confrontation.