A Firm Has Total Assets of $800,000 and Total Liabilities

question 61

Multiple Choice

A firm has total assets of $800,000 and total liabilities of $300,000. Earnings before interest and taxes are $100,000. Interest is $21,000 and taxes are $34,000. The return on shareholders' funds is:

• A) 9.0%.
• B) 8.0%.
• C) 12.5%.
• D) 3.8%.

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Definitions:

Nonprogrammed Decisions

Decisions that are unique and require custom solutions, typically made in complex and unpredictable situations.

Define The Problem

The initial step in the problem-solving process, involving a clear understanding of the challenge to be addressed.

Decision-making Model

A conceptual framework that outlines the process of making choices by identifying options, evaluating them, and selecting a course of action.

Complete Rationality

The assumption that we take into account every single criterion or possible alternative to make a decision.