Q1. A division earning a profit will increase its return on investment (ROI) if it increases operating expenses and :

A. sales by the same dollar amount

B. sales by the same %

C. investment by the same dollar amount

D. investment by the same %

Q2. Which of the following statements regarding the use of historical costs and current costs to compute return on investment (ROI) is (are) true?

A. Historical costs are based on the original costs to acquire a long term asset while current costs represent the costs to replace the long term debt

B. For a specific multiple period project, the return on investment (ROI) computed using current costs will generally be less than the ROI computed using historical costs

A. A

B. B.

C. Both

D. Neither