Which of the Following Statements Is CORRECT

question 68

Multiple Choice

Which of the following statements is CORRECT?

• A) An increase in a firm's debt ratio, with no changes in its sales or operating costs, could be expected to lower the profit margin.
• B) The ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the DSO or the inventory turnover ratio.
• C) If two firms have the same ROA, the firm with the most debt can be expected to have the lower ROE.
• D) An increase in the DSO, other things held constant, could be expected to increase the total assets turnover ratio.
• E) An increase in the DSO, other things held constant, could be expected to increase the ROE.

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Definitions:

Offer Terminates

Offer terminates refers to the point at which a proposal for a contract or agreement is withdrawn or becomes invalid, ending the possibility of acceptance.

Offeree's Death

In contract law, the death of the offeree terminates an offer, preventing acceptance of the offer thereafter.

Offeree

The person or entity to whom an offer is made, particularly in contract law.

Offer

A proposal by one party to another intending to create a legally binding agreement upon acceptance.