Question
The following question relates to PQR, which has the following ratios: return on assets, (ROA) 10 per cent; return on equity (ROE) 12 per cent;
The following question relates to PQR, which has the following ratios: return on assets, (ROA) 10 per cent; return on equity (ROE) 12 per cent; and current ratio (CR) of 1.8:1. The company changed accounting methods by deciding to capitalise rather than expense a research and development outlay. This will:
| A. | increase ROE, but have no effect on ROA and CR. |
| B. | increase ROA, ROE and CR. |
| C. | increase ROA and ROE, but have no effect on CR. |
| D. | have no effect on ROA, ROE or CR. |
Give the reason please
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The Art Of Safety Auditing A Tutorial For Regulators
Authors: Sasho Andonov
1st Edition
0367351080, 978-0367351083
