Which of the Following Would Most Likely Increase the Net

question 5

Multiple Choice

Which of the following would most likely increase the net profit margin ratio?

• A)An increase in the unit selling price.
• B)A decrease in the overall sales volume.
• C)An increase in operating expenses.
• D)An increase in cost of goods solD.An increase in the unit selling price will increase net income by a greater amount proportionately relative to the increase in net sales.

---

Definitions:

Stock Dividend

A form of dividend payment made in shares rather than cash, which increases the number of shares held by each shareholder.

Retained Earnings

The portion of a company's accumulated net income that is not distributed to shareholders as dividends but is kept as reserves for reinvestment in the business operations.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Fair Value

An estimate of the price at which an asset could be bought or sold in a current transaction between willing parties, not in a forced or liquidation sale.