Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A)A reduction in inventories would have no effect on the current ratio.
• B)An increase in inventories would have no effect on the current ratio.
• C)If a firm increases its sales while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• D)A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.
• E)If a firm increases its sales while holding its inventories constant, then, other things held constant, its fixed assets turnover ratio will decline.

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Definitions:

Water Consumption

The amount of water used by an individual, community, or area.

Violent Crime Rate

A statistical measure of the number of violent crimes reported per unit of population or given time period.

Matched Pairs

A study design where subjects are paired based on certain criteria, making them comparable, and then treated differently to examine effects.

Independent Samples

Two or more groups of samples that are collected from independent populations, and where the selection of a sample from one population does not influence the selection from another.