BD Hydro Increases Its Operating Efficiency Such That Costs Decrease

question 12

Multiple Choice

BD Hydro increases its operating efficiency such that costs decrease while sales remain constant. As a result, given all else constant, the:

• A) Return on equity will increase.
• B) Return on assets will decrease.
• C) Profit margin will decline.
• D) Equity multiplier will decrease.
• E) Price-earnings ratio will increase.

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Definitions:

Four-Plex

A residential building divided into four separate units or apartments, each functioning as a separate dwelling.

Net Rental Income

The profit derived from renting out property after deducting all allowable expenses related to the rental activity.

Standard Mileage Rate

The Standard Mileage Rate is a set rate per mile established by the IRS that taxpayers can use to calculate deductible vehicle expenses for business, medical, moving, or charitable purposes.

Travel Costs

Expenses associated with traveling for business, medical, or charitable purposes that may be deductible under certain conditions.