Question
Which of the following statements is/are incorrect: 1. If a business shows an improved operating profit margin compared to last year, this implies that operating
Which of the following statements is/are incorrect: 1. If a business shows an improved operating profit margin compared to last year, this implies that operating costs (as a proportion of revenue) must have decreased compared to last year. 2. When a business is profitable, higher gearing will help increase the return on equity. 3. The tax paid to be included in the computation of net cash from operating activities can be computed as follows: opening tax liability (accrual) + tax expense-closing tax liability (accrual). 4. Interest received can appear either under cash flows from operating activities or under cash flows from financing activities. Select one: a. 1 and 4 b. 2 and 3 c. None of the combinations shown among the answers d. 2, 3 and 4 e. 1, 2 and 3
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