As the Financial Leverage Multiplier Increases This May Result in

Multiple Choice

As the financial leverage multiplier increases this may result in

A) an increase in the net profit margin and return on investment, due to the increase in interest expense as debt increases.
B) a decrease in the net profit margin and return on investment, due to the increase in interest expense as debt increases.
C) a decrease in the net profit margin and return on investment, due to the decrease in interest expense as debt decreases.
D) an increase in the net profit margin and return on investment, due to the decrease in interest expense as debt decreases.