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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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