What Effect Will Transaction (B)have on the Net Profit Margin

question 7

Multiple Choice

What effect will transaction (b) have on the net profit margin ratio and the debt-to-assets ratio?

• A)Net profit margin ratio will be unaffected and the debt-to-assets ratio will increase.
• B)Net profit margin ratio will increase and the debt-to-asset ratios will not be affected.
• C)Net profit margin ratio will be unaffected and the debt-to assets ratio will decrease.
• D)Net profit margin ratio will decrease and the debt-to-assets ratio will increase.

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