Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm increases its sales and cost of goods sold while holding its inventories constant, then, other things held constant, its inventory turnover ratio will decrease.
• B) A reduction in inventories held would have no effect on the current ratio.
• C) An increase in inventories would have no effect on the current ratio.
• D) If a firm increases its sales and cost of goods sold while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• E) A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.

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Definitions:

Learning Principles

Fundamental guidelines or rules that describe how people acquire new knowledge, skills, attitudes, or behaviors.

Human Behavior

The entirety of actions, reactions, and interactions undertaken by humans, influenced by culture, attitudes, emotions, values, ethics, and the external environment.

Social Psychology

The scientific study of how people affect and are affected by others.

Kurt Lewin

A pioneering psychologist known for his work in group dynamics, social psychology, and organizational development, and for founding action research.