The Following Question Relates to PQR, Which Has the Following

question 29

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. Directors decided to revalue land upwards by $350 000. This transaction will:

• A) increase ROA and ROE.
• B) decrease ROA and ROE.
• C) decrease ROA but have no effect on ROE.
• D) have no effect.

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Definitions:

Water Velocity

The speed at which water flows in a given direction within a river, stream, or other body of water.

Downstream

In the direction that a stream or river flows, from its source towards its mouth, often used to describe areas or processes occurring in this direction.

Sediment Load

The amount of sediment carried by a river, stream, or other body of moving water, which can affect water quality and ecosystem health.

Stream Velocity

The speed at which water flows in a stream or river, typically measured in meters per second.