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    Question

    Which of the following increases return on assets (ROA)

    if profit constant?
    A Increase in total assets Correct Answer Incorrect Answer
    B Decrease in total assets Correct Answer Incorrect Answer
    C Increase in operating expenses Correct Answer Incorrect Answer
    D Increase in interest expense Correct Answer Incorrect Answer

    Solution

    ROA = Net Income / Total Assets. If Net Income remains constant and Total Assets decrease, the ROA will increase.

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