Detailed Answer
Answer (B) is correct.
Return on investment (ROI) is calculated by dividing business unit
profits over average total assets. The raw materials bought in advance
and stored in the manufacturing plant inventory will increase the
denominator of the fraction. The numerator remains unchanged since the
facts do not indicate any excess profit after the materials were bought in
advance. If the numerator is unchanged and the denominator increases,
the total fraction will decrease.