Select all that applyA company can potentially increase its return on investment (ROI) by Blank______. Multiple select question.investing in operating assetsreducing operating expensesborrowing additional fundsincreasing sales
Question
Select all that applyA company can potentially increase its return on investment (ROI) by Blank______. Multiple select question.investing in operating assetsreducing operating expensesborrowing additional fundsincreasing sales
Solution
A company can potentially increase its return on investment (ROI) by:
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Investing in operating assets: This can increase the company's productivity and efficiency, leading to higher profits and a higher ROI.
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Reducing operating expenses: By cutting costs, a company can increase its net income, which in turn can increase its ROI.
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Increasing sales: Higher sales can lead to higher profits, which can increase a company's ROI.
Borrowing additional funds may not necessarily increase a company's ROI. While it can provide the company with more capital to invest and potentially increase profits, it also increases the company's liabilities and interest expenses. Therefore, whether or not borrowing additional funds increases ROI would depend on how effectively the company uses those funds.
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