The following question relate to PQR, which has the following ratios: return on assets, (ROA) 12%; return on equity (ROE) 14%; and current ratio (CR) of 2:1.
-Directors decided to revalue land upwards by $200 000.This transaction will:
A) increase ROA and ROE
B) decrease ROA and ROE
C) decrease ROA,but have no effect on ROE
D) have no effect.

Question

Quizplus · Accepted Answer

Revaluing land upwards increases total assets and equity, reducing ROA and ROE as net income remains unchanged.

The Following Question Relate to PQR, Which Has the Following