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) 12 per cent; return on equity (ROE) 14 per cent; and current ratio (CR) of 1.8:1. The company changed accounting methods by deciding to capitalise rather than expense a research and development outlay. This will:

A) increase ROE, but have no effect on ROA and CR.
B) increase ROA, ROE and CR.
C) increase ROA and ROE but have no effect on CR.
D) have no effect on ROA, ROE or CR.