The Following Question Relates to PQR,which Has the Following Ratios

Multiple Choice

The following question relates to PQR,which has the following ratios: return on assets, (ROA) 10 per cent;return on equity (ROE) 12 per cent;and current ratio (CR) of 1.8:1.
-The company purchased raw materials on credit for $400 000.This transaction will:

A) decrease ROA,ROE and CR.
B) decrease ROA and CR,but not ROE.
C) decrease ROA only.
D) have no effect.