COST ACCOUNTING
RESPONSIBILITY ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Increasing the peso sales and operating expenses by the same percentage
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Decreasing the peso sales and operating expenses by the same percentage
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Increasing the peso sales and operating expenses by the same peso amount
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Decreasing the peso sales and operating expenses by the same peso amount
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Detailed explanation-1: -One clear way of increasing your ROI is to grow your sales and generate more revenue, which will keep pushing your ROI ratio higher. In terms of digital marketing, you also need to look at how much your ad spending is contributing to the revenue.
Detailed explanation-2: -Financial leverage increases a company’s return on equity so long as the after-tax cost of debt is lower than its return on equity. As profits are in the numerator of the return on equity ratio, increasing profits relative to equity increases a company’s return on equity.
Detailed explanation-3: -Increasing operating income (e.g., by decreasing expenses or by increasing prices or sales volume) or decreasing the investment base improves ROI.
Detailed explanation-4: -Return on investment (ROI) is a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost. It is most commonly measured as net income divided by the original capital cost of the investment. The higher the ratio, the greater the benefit earned.