Which of the Following Statements Is CORRECT

question 92

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm increases its sales and cost of goods sold while holding its inventories constant, then, other things held constant, its inventory turnover ratio will decrease.
• B) A reduction in inventories held would have no effect on the current ratio.
• C) An increase in inventories would have no effect on the current ratio.
• D) If a firm increases its sales and cost of goods sold while holding its inventories constant, then, other things held constant, its inventory turnover ratio will increase.
• E) A reduction in the inventory turnover ratio will generally lead to an increase in the ROE.

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Definitions:

Inferential Statistics

The branch of statistics that focuses on making predictions or inferences about a population based on a sample of data drawn from that population.

Confounding Variables

Variables that the researcher failed to control or eliminate, which can cause a false association between the studied variables.

Control Group

Group of participants in an experiment not exposed to the independent variable.