Which of the following would increase the net profit margin in the current year?
A)Postpone routine maintenance work that was to be done this year.
B)Increase the amount of research and development in the last month of the year.
C)Postpone the purchase of supplies to the first month of the following year.
D)Postpone dividends to stockholders.

Question

Quizplus · Accepted Answer

Net profit margin = Net income ÷ Revenues
Postponing routine maintenance work that was to be done this year would decrease expenses and,as a result,net income would increase as would the net profit margin ratio.Increasing the amount of research and development in the last month of the year would increase expenses and,as a result,net income would decrease as would the net profit margin ratio.Postponing the purchase of supplies to the first month of the following year would have no effect on the net profit margin ratio since that transaction does not affect revenues or expenses.Postponing dividends to stockholders would have no effect on the net profit margin ratio since that transaction does not affect revenues or expenses.

Which of the Following Would Increase the Net Profit Margin