Answer:
increasing sales revenue and operating expenses by the same percentage.
Explanation:
Return of investment is defined as the profit that is gained on a certain amount of invested capital in a business.
A business ensures it has a high return on investments to satisfy customer need for profit. It is a ratio of net profit to invested capital.
This also boosts confidence to invest more.
To increase ROI a firm will need to increase profit and operating expense by the same percentage.
For example if profit in a business is $100 and operating expense is $80, the net profit will be $20
However if we increase both sales revenue and operating expense by 10%, we will have profit of $110 and a operating expense of $88. The net profit will now be $22 resulting in a higher ROI.
Answer:
C. Increasing sales revenue and operating expenses by the same dollar amount.
Explanation:
ROI or return on Investment is the amount the which is received as a return on your capital invested. Hence the more the better for business.
For example,
The Sales revenue is $200 and the operating expenses are $100, so the net profit will be => 200-100 = $100.
Now if we increase the sales revenue and operating expenses by the same percentage let say 10%.
The NEW sales revenue will be = 200*1.1 = $220.
The NEW operating costs will be = 100*1.1 = $110.
Hence, the new profit will be = 220-110 = $110.
Therefore, increasing sales revenue and operating costs by the same percentage would increase ROI by $10.
Hope this helps.
Good Luck.
