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

question 38

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.
-A company declares and pays a final dividend.The effect of this transaction is to:

• A) decrease CR,but not affect ROA and ROE.
• B) decrease CR,but increase ROA and ROE.
• C) decrease CR,increase ROA,and not affect ROE.
• D) have no effect.

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Definitions:

Time-Driven Activity-Based Costing

An approach to activity-based costing that assigns resource costs directly to products or services based on the estimated time required for each activity.

Customer Service Department

A division within a company that handles inquiries, complaints, and support requests from customers.

Capacity Analysis

Calculating the production capacity an organization needs to fulfill the dynamic demands for its products.

Time-Driven

A method or approach that bases calculations, actions, or operations on the passage of time, often used in costing and scheduling.