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The Puma health plan uses return on investment (ROI) and residual income (RI) to measure...

The Puma health plan uses return on investment (ROI) and residual income (RI) to measure the performance of its investment centers. Two of these investment centers are identified as X and Y. Investment Center X earns $10,000,000 in operating income on controllable investments of $50,000,000, and it has total revenues of $60,000,000. Investment Center Y earns $2,000,000 in operating income on controllable investments of $8,000,000, and it has total revenues of $10,000,000. Both centers have a minimum required rate of return of 15%.

One likely way in which Investment Center X or Y could effectively increase its ROI is by

A.

Focusing only on increasing its total revenues

B.

Increasing its controllable investments

C.

Increasing total revenues, accompanied by a proportionate increase in operating income

D.

Increasing expenses in order to increase operating income

AHIP AHM-520 Summary

  • Vendor: AHIP
  • Product: AHM-520
  • Update on: Jan 2, 2026
  • Questions: 215
Price: $52.5  $149.99
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