Which of the following would most likely improve a project's cash-on-cash return?

Improving a project's cash-on-cash return focuses on enhancing the efficiency of the cash that is being generated relative to the cash invested. Cash-on-cash return is calculated by taking the annual cash income generated by the investment and dividing it by the total cash invested in the project.

By reducing total cash invested, you effectively increase the ratio of cash income to cash invested. This means even if the annual cash income remains constant, the lower investment amount results in a higher cash-on-cash return. For example, if a project generates $10,000 in cash income and the total cash invested is decreased from $100,000 to $80,000, the cash-on-cash return rises from 10% to 12.5%.

In contrast, increasing operational costs, minimizing annual cash income, or maximizing expenses would diminish the project's cash-on-cash return by increasing the denominator or reducing the numerator of the calculation. Therefore, reducing total cash invested is the most effective strategy for enhancing cash-on-cash return.