New Corporation has a diversified product line. Currently, the companys asset turnover is greater than one, and the companys profit margin, ROI, and residual income are all positive. Consider each situation below independently.

29. Assume that New Corporation purchases 1,000 pounds of raw materials on account at the end of the year for use in production during the following year. What is the effect of this transaction on the corporations asset turnover, profit margin, ROI, and residual income?

	Asset Turnover	Profit Margin	Return on Investment	Residual Income
A.	Decrease	No Effect	Decrease	Decrease
B.	Decrease	Decrease	Decrease	Indeterminate Effect
C.	No Effect	No Effect	No Effect	No Effect
D.	Increase	Decrease	Indeterminate Effect	No Effect
E.	No Effect	Decrease	Decrease	Decrease