The Following Question Relates to PQR, Which Has the Following

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. Directors decided to revalue land upwards by $350 000. This transaction will:

A) increase ROA and ROE.
B) decrease ROA and ROE.
C) decrease ROA but have no effect on ROE.
D) have no effect.