Assume JKLumber Increases Its Operating Efficiency Such That Costs Decrease While

question 67

Multiple Choice

Assume J.K.Lumber increases its operating efficiency such that costs decrease while sales remain constant.As a result,given all else constant,the

• A)equity multiplier will decrease.
• B)return on assets will decrease.
• C)profit margin will decline.
• D)return on equity will increase.
• E)total asset turnover will increase.

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Definitions:

Wholesale Prices

The cost at which goods are sold by wholesalers to retailers, usually lower than the retail price due to the absence of retailer markup.

Wholesalers

Businesses that sell goods in large quantities at lower prices, typically to retailers, other businesses, or professional users, but not directly to the end consumer.

Category Specialists

Retailers or businesses that focus on a specific category of products, offering a wide selection and deep knowledge within that category.

Category Killers

are large retail chain stores that specialize in a single category of products and dominate that category, often leading to the decline of small specialty stores.