Which One of the Following Would Cause a Decrease in the Cost

question 101

Multiple Choice

Which one of the following would cause a decrease in the cost ratio as used in the retail inventory method?

• A) Higher retail prices
• B) Lower net markups
• C) More employee discounts given
• D) Higher freight-in charges

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Definitions:

Price-Earnings Ratio

A measurement that contrasts a firm's stock price with its earnings per share to determine if its shares are valued appropriately.

Dividends

Distributions of earnings to stockholders; an account representing the distribution of a corporation’s earnings to stockholders.

Dividend Yield

A financial ratio that measures the dividend paid to shareholders relative to the market value per share, indicating the earnings from investment in stocks.

Market Price

The present rate at which a product or service can be purchased or sold in the market.