Question

question 7
5 pts
return on assets (roa) can be positively affected by:
○ increasing prices but keeping constant volume of sales (number of units sold), total expenses and total assets.
○ all of the answers are correct
○ increasing prices but keeping constant volume of sales (number of units sold), total expenses and total assets.
○ some combination of increasing net profit margins and increasing asset turnover
○ increasing the net profit margin on each individual sale transaction without decreasing asset turnover

Explanation:

ROA is calculated as Net Income/Total Assets. Increasing prices with constant sales volume, expenses and assets raises net - income, positively affecting ROA. Also, increasing net - profit margins and asset turnover, or increasing net - profit margin per sale without decreasing asset turnover, all increase the numerator (net income) relative to the denominator (total assets), thus positively affecting ROA.

Answer:

B. All of the answers are correct