Poseidon Electronics operates 10 stores in Washington, Oregon, and California, selling consumer electronics including home theater systems. The following financial information is available for 2021 and 2020:

		2021		2020
Income from operations		$614,250		$585,000
Net income		122,850		117,000
Total assets		5,200,000		4,200,000
Noninterest-bearing current liabilities		310,000		308,000
Tax rate		20%		20%
Cost of capital		12%		12%

Management asserts that the increased investment in the company's assets was clearly warranted since income increased. Briefly evaluate this assertion.