Which of the following transactions will increase a corporation's operating return on assets?
A) sell stock and use the money to pay off some long-term debt
B) sell 10-year bonds and use the money to pay off current liabilities
C) negotiate a new contract that lowers raw material costs by 10%
D) increase sales by 10%

Question

Quizplus · Accepted Answer

Reducing raw material costs by 10% will decrease expenses, thereby increasing net income without affecting total assets, which will increase the operating return on assets.

Which of the Following Transactions Will Increase a Corporation's Operating