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The performance of the manager of Division A is measured by ROI. Which of the following...

The performance of the manager of Division A is measured by ROI. Which of the following would increase ROI?

Question 5 options:

Increase in sales

Increase in average operating assets

Increase in expenses

Decrease in net operating income
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Answer #1

Increase in sales would increase ROI as ROI is calculated by dividing Net income / Cost of investment. Hence increase in sales would result in increase in net income.

Hence option increase in sales is correct.

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