10. Assuming that sales and operating income remain the same, which of the following statements about a company's return on investment is correct? Select one: a. It will decrease if operating assets decrease. b. It will decrease if turnover decreases. c. It will decrease if turnover increases. d. It will increase if operating assets increase.

10. Assuming that sales and operating income remain the same, which of the following statements about a company's return on investment is correct? Select one: a. It will decrease if operating assets decrease. b. It will decrease if turnover decreases. c. It will decrease if turnover increases. d. It will increase if operating assets increase.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 21E: If sales and average operating assets for Year 2 are identical to their values in Year 1, yet...

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If sales and average operating assets for Year 2 are identical to their values in Year 1, yet operating income is higher, Year 2 return on investment (compared with Year 1 ROI) will a. decrease b. increase c. stay the same d. cannot be determined from the above information
If sales and average operating assets for Year 2 are identical to their values in Year 1, yet operating income is higher, Year 2 return on investment (compared with Year 1 ROI) will a. decrease. b. increase. c. stay the same. d. The direction of change in ROI cannot be determined by this information.
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9. Which of the following strategy enables a manager to report a higher current ratio? Select one: a. Pay off accounts payable prior to year-end b. Purchase more fixed assets c. Purchase more fixed income securities d. Invest more in long term debt