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26. True or False: Firms generally prefer to have a positive working capital (current assets - current liabilities). a. True b. False 27. True or False: Purchasing direct materials on account (i.e. buy now, pay later), all else equal, would decrease a firm's ROI (NOI/average operating assets). a. True b. False 28. True or False: All else equal, an increase in the cost of sales commissions would decrease both a firm's gross profit margin % (Gross Margin/Sales) and a firm's net profit margin % (Net Income/Sales). a. True b. False

26. True or False: Firms generally prefer to have a positive working capital (current assets - current liabilities). a. True b. False 27. True or False: Purchasing direct materials on account (i.e. buy now, pay later), all else equal, would decrease a firm's ROI (NOI/average operating assets). a. True b. False 28. True or False: All else equal, an increase in the cost of sales commissions would decrease both a firm's gross profit margin % (Gross Margin/Sales) and a firm's net profit margin % (Net Income/Sales). a. True b. False

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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26. True or False: Firms generally prefer to have a positive working capital (current assets - current liabilities). a. True b. False 27. True or False: Purchasing direct materials on account (i.e. buy now, pay later), all else equal, would decrease a firm's ROI (NOI/average operating assets). a. True b. False 28. True or False: All else equal, an increase in the cost of sales commissions would decrease both a Mo firm's gross profit margin % (Gross Margin/Sales) and a firm's net profit margin % (Net Income/Sales). a. True b. False
Transcribed Image Text:26. True or False: Firms generally prefer to have a positive working capital (current assets - current liabilities). a. True b. False 27. True or False: Purchasing direct materials on account (i.e. buy now, pay later), all else equal, would decrease a firm's ROI (NOI/average operating assets). a. True b. False 28. True or False: All else equal, an increase in the cost of sales commissions would decrease both a Mo firm's gross profit margin % (Gross Margin/Sales) and a firm's net profit margin % (Net Income/Sales). a. True b. False
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