Final answer:
Inventory Turnover will increase if inventory decreases. The correct answer is B) Inventory Turnover.
Step-by-step explanation:
The performance measure that will increase if inventory decreases and all else remains the same is Inventory Turnover. Inventory turnover is a financial ratio that measures how many times a company sells and replaces its inventory over a specific period of time. It is calculated by dividing the cost of goods sold by the average inventory for the same period.
When the inventory decreases, it means that the company is selling its inventory at a faster rate, leading to a higher inventory turnover. A higher inventory turnover indicates that the company's inventory is being managed efficiently and that sales are increasing.
On the other hand, the other performance measures (Return on Investment, Profit Margin, and Asset Turnover) may or may not be affected by changes in inventory, as they involve other aspects of the company's financial performance.