The Following Question Relates to PQR,which Has the Following Ratios

question 16

Multiple Choice

The following question relates to PQR,which has the following ratios: return on assets, (ROA) 10 per cent;return on equity (ROE) 12 per cent;and current ratio (CR) of 1.8:1.
-Additional credit sales of $2 million (cost price $1.5 million) are made.This transaction will:

• A) increase ROA,ROE and CR.
• B) increase ROA and ROE but not CR.
• C) increase ROA and CR but not ROE.
• D) increase ROA,increase ROE and decrease CR.

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Definitions:

Denominated

Defined or stated in the context of a specific currency or measurement unit.

Currency

Medium of exchange, in the form of banknotes and coins, that is officially used in a country or economic region.

Foreign Bond

A bond denominated in the currency of the country in which it is sold, but issued by a foreign borrower.

Domestic Bonds

Domestic bonds are debt securities issued within a country by domestic entities, including the government, cities, or corporations, and are denominated in the country's own currency.