Which of the Following Statements Is CORRECT

question 10

Multiple Choice

Which of the following statements is CORRECT?

• A) Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%. Under these
• Conditions, the ROE will increase.
• B) Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%. Without additional
• Information, we cannot tell what will happen to the ROE.
• C) The modified Du Pont equation provides information about how operations affect the ROE, but the equation does not include the
• Effects of debt on the ROE.
• D) Other things held constant, an increase in the debt ratio will
• Result in an increase in the profit margin on sales.
• E) Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10%, and its debt increases from 40% of total assets to 60%. Under these conditions, the ROE will decrease.

---

Definitions:

Behavior Genetics

The study area concerned with identifying how genetics and environmental conditions influence behavioral patterns.

Natural Selection

The process by which organisms that are better adapted to their environment tend to survive and produce more offspring.

Bitter-Tasting Foods

Refers to edible substances that have a sharp, pungent flavor often perceived as unpleasant, which can vary based on genetic makeup and cultural preferences.

Genetically Predisposed

A condition where an individual has a higher likelihood of developing certain traits or diseases due to their genetic composition.