If the return on assets is positive, an increase in total assets will result in
A)an increase in the return on assets.
B)a decrease in the return on assets.
C)no change in the return on assets.
D)The effect cannot be determined.

Question

Quizplus · Accepted Answer

An increase in total assets, with a positive return on assets, will decrease the return on assets if the additional assets do not generate a proportionate increase in net income.

If the Return on Assets Is Positive, an Increase in Total