If sales and expenses both rise by $100,000,profit margin will
A)decrease and asset turnover will decrease.
B)increase and asset turnover will decrease.
C)decrease and asset turnover will increase.
D)increase and asset turnover will increase.

Question

Quizplus · Accepted Answer

If both sales and expenses increase by the same amount, the profit margin will decrease as the expenses will offset the sales increase. However, the asset turnover will increase as there will be more activity in the business.

If Sales and Expenses Both Rise by $100,000,profit Margin Will