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:

Krafft-Ebing

Refers to Richard von Krafft-Ebing, a 19th-century Austrian psychiatrist known for his work on sexual psychopathology.

Skepticism

A philosophical approach that questions the validity or authenticity of something purported to be factual.

Sexual Response Cycle

The sequence of changes that occur in the body with increased sexual arousal, orgasm, and the return to the unaroused state, noted by William Masters and Virginia Johnson.