Final answer:
Reducing expenses can have a positive effect on ROI by increasing net income and generating higher profits for a business.
Step-by-step explanation:
When it comes to ROI (Return on Investment), reducing expenses can have a positive effect. By reducing expenses, a business is able to increase its net income, which in turn improves its ROI. For example, if a company decreases its overhead costs by negotiating lower rent or reducing its utility bills, it can increase its profits. This results in a higher ROI because the company is able to generate more income from its investments while keeping expenses under control.