Given below are two statements: Assertion (A): The Return on Total Assets (ROTA) of a firm decreases over time. Reason (R): A reduction in ROTA is caused either by less efficient utilization of total assets or by a lower net profit margin. Choose the correct option:

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Economics · Financial Statement Analysis

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Both (A) and (R) are true and (R) is the correct explanation of (A).

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Answer 1

(A) is false, but (R) is true.

Answer 2

(A) is true, but (R) is false.

Answer 3

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Answer 4

Both (A) and (R) are true and (R) is the correct explanation of (A).

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