If a Firm Decreases Its Operating Costs, All Else Constant

question 51

Multiple Choice

If a firm decreases its operating costs, all else constant, then:

• A)the profit margin increases while the equity multiplier decreases.
• B)the return on assets increases while the return on equity decreases.
• C)the total asset turnover rate decreases while the profit margin increases.
• D)both the profit margin and the equity multiplier increase.
• E)both the return on assets and the return on equity increase.

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A form of communication network within an organization where information, often unofficial or speculative, spreads rapidly through informal channels.

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Unverified information or speculation that is spread among people, which may or may not be true.