A Decrease in Net Operating Profit Margin Will Cause Both

question 31

True/False

A decrease in net operating profit margin will cause both return on net operating assets and return on equity to decrease, all other things being equal.

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Definitions:

Prediction Interval

An estimate of an interval in which future observations will fall, with a certain level of confidence, based on current sample data.

Expected Value

The average outcome or mean of a random variable, calculated as the sum of all possible values each multiplied by its probability of occurrence.

Confidence Interval

A gamut of statistical values, extrapolated from sample data, predicted to likely retain the value of an undisclosed population parameter.

Gross Revenue

The total income generated by a business before any deductions are made for expenses.