A Company That Has a Profit Can Increase Its Return

question 79

Multiple Choice

A company that has a profit can increase its return on investment by:

• A) increasing sales revenue and operating expenses by the same dollar amount.
• B) increasing average operating assets and operating expenses by the same dollar amount.
• C) increasing sales revenue and operating expenses by the same percentage.
• D) decreasing average operating assets and sales by the same percentage.

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Definitions:

Gross Pay

The gross income of an employee, which is the sum of all earnings before deductions or taxes are applied.

Deductions

Expenses or amounts subtracted from gross income to reduce the taxable income.

FICA-OASDI

Refers to the Social Security portion of the Federal Insurance Contributions Act tax, covering both the Old Age, Survivors, and Disability Insurance.

Cumulative Earnings

The total amount of net income an entity has earned over its life, up to the current reporting date, not yet distributed to shareholders.