Assuming That Sales and Net Operating Income Remain the Same,a

question 7

Multiple Choice

Assuming that sales and net operating income remain the same,a company's return on investment will:

• A) increase if average operating assets increase.
• B) decrease if average operating assets decrease.
• C) decrease if turnover decreases.
• D) decrease if turnover increases.

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Definitions:

Rate Of Return

The upward or downward movement in the worth of an investment for a predefined interval, calculated as a percentage of the investment's inaugural cost.

Discount Rate

The Discount Rate is the interest rate used to determine the present value of future cash flows in discounted cash flow analysis.

Predicting Variables

Variables in statistical models that are used to predict outcomes or responses of interest.

Regression Analysis

A statistical method used to model the relationship between a dependent variable and one or more independent variables.