In Each of the Last Five Years, the Net Sales

question 23

Multiple Choice

In each of the last five years, the net sales of Plaza Co. have increased at about half the rate of inflation, but net income has increased at approxi?mately twice the rate of inflation. During this period, the company's total assets, liabilities, and equity have remained almost unchanged; dividends are approximately equal to net income. These relationships suggest (indicate all correct answers) :

• A) Management is successfully controlling costs and expenses.
• B) The company is selling more merchandise every year.
• C) The annual return on assets has been increasing.
• D) Financing activities are likely to result in a net use of cash.

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Definitions:

Ciliary Action

The movement of cilia, small hair-like structures, which work to move particles or fluids over the surface of certain cells.

Corpus Luteum

A temporary endocrine structure in female ovaries that is involved in the production of progesterone and estrogen during the menstrual cycle and early pregnancy.

Gonadotropins

Hormones produced by the anterior pituitary gland that stimulate the activity of the gonads (ovaries and testes).

Lipotropins

Hormones produced by the anterior pituitary gland, involved in fat metabolism and the stimulation of lipolysis.