Assume BGL Enterprises Increases Its Operating Efficiency by Lowering Its

question 64

Multiple Choice

Assume BGL Enterprises increases its operating efficiency by lowering its costs while holding its sales constant.As a result,given all else constant,the:

• A)return on equity will increase.
• B)return on assets will decrease.
• C)profit margin will decline.
• D)total debt ratio will decrease.
• E)price-earnings ratio will increase.

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Definitions:

Actual Costs

The real costs incurred in the production of goods or services, including all direct and indirect expenses.

Inefficient Divisions

Parts of an organization that operate with lower productivity or effectiveness compared to expected standards.

Production Costs

The total expense involved in manufacturing goods, including raw materials, labor, and overhead costs.

General Rule

A principle or guideline that applies broadly and is considered to be of general use or value.