The Following Question Relate to PQR, Which Has the Following

question 8

Multiple Choice

The following question relate to PQR, which has the following ratios: return on assets, (ROA) 12%; return on equity (ROE) 14%; and current ratio (CR) of 2:1.
-Directors decided to revalue land upwards by $200 000.This transaction will:

• A) increase ROA and ROE
• B) decrease ROA and ROE
• C) decrease ROA,but have no effect on ROE
• D) have no effect.

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Definitions:

Considered

Thought about or taken into account when making a decision or judgment.

Perfection

In legal terms, the act of completing all required steps to secure a legal right or interest, making it enforceable against third parties.

Legal Process

The procedure of pursuing formal legal action through courts, including all judicial steps from initiation to resolution.

Secured Obligation

A debt or other type of financial obligation that is backed by collateral to reduce the risk of non-payment.