For a Given Level of Profitability as Measured by Profit

question 9

Multiple Choice

For a given level of profitability as measured by profit margin, the firm's return on equity will

• A) increase as its debt-to-assets ratio decreases.
• B) decrease as its current ratio increases.
• C) increase as its debt-to-assets ratio increases.
• D) decrease as its times-interest-earned ratio decreases.

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Definitions:

Sensation Seeking

A trait characterized by the seeking of varied, novel, complex, and intense sensations and experiences, even if this involves physical, social, legal, or financial risks.

Police Officer

A law enforcement member tasked with maintaining public order, safety, and enforcing laws.

Race-Car Driver

An individual specialized in competing in high-speed motor vehicle races.

Zuckerman

A surname associated with Marvin Zuckerman, an American psychologist known for his research on sensation seeking and personality.