As the financial leverage multiplier increases, this may result in ________
A) an increase in the net profit margin and return on investment, due to the decrease in interest expense as debt decreases
B) an increase in the net profit margin and return on investment, due to the increase in interest expense as debt increases
C) a decrease in the net profit margin and return on investment, due to the increase in interest expense as debt increases
D) a decrease in the net profit margin and return on investment, due to the decrease in interest expense as debt decreases
C
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Assume that each year the IRS randomly audits 10% of the tax returns. If a married couple has filed separate returns, a.What is the probability that both the husband and the wife will be audited?b.What is the probability that only one of them will be audited?c.What is the probability that neither one of them will be audited?d.What is the probability that at least one of them will be audited?
What will be an ideal response?
Each of the following statements violates a concept or convention of accounting. Write the letter in the blank next to each statement corresponding to the concept or convention violated. a. Consistency d. Full disclosure b. Materiality e. Cost-benefit c. Conservatism _____ 1. A note to the financial statements indicating a change in inventory methods is omitted. _____ 2. When management is unsure
of which estimates to use in a given situation, the estimate resulting in the largest net income is always used. _____ 3. In 20x5, a company uses straight-line depreciation and in 20x6 the company uses declining-balance depreciation. _____ 4. A small company expenses all expenditures under $10,000. _____ 5. A small company purchases a $50,000 computer to save $3,000 per year in bookkeeping wages. Fill in the blank(s) with correct word
Discuss Ronen’s solution to the problem of companies “capturing” auditors as a result of management consulting contracts between auditor and auditee.
What will be an ideal response?
An estimate based on an analysis of receivables shows that $790 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $120. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:
A) $120 B) $790 C) $670 D) $910