The Following Question Relates to PQR,which Has the Following Ratios

question 15

Multiple Choice

The following question relates to PQR,which has the following ratios: return on assets, (ROA) 10 per cent;return on equity (ROE) 12 per cent;and current ratio (CR) of 1.8:1.
-A customer provides a deposit of $500 000 near year-end.The product will not be delivered until next year.This transaction will:

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

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Definitions:

World Price

The international market price of a good or service, influenced by global supply and demand conditions.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price in a given time period.

World Price

The international price at which goods are traded between countries, affecting domestic markets.

No-Trade Prices

Prices at which market participants are not willing to trade, indicating either a lack of demand at higher prices or a lack of supply at lower prices.