Which of the Following Is Not Correct Regarding the Rate

question 19

Multiple Choice

Which of the following is not correct regarding the rate of return on assets?

• A) The rate of return on assets measures management's ability to productively employ all its resources.
• B) The rate of return on assets measures the return on all assets used regardless of how the assets are financed.
• C) The rate of return on assets is a measure of profitability.
• D) The rate of return on assets measures the return on the investment made by the owners of the entity.

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Definitions:

Period

A length or portion of time.

Capital Gains Yield

The part of an investment's total return that comes from the increase in its value, not including dividends or interest earnings.

Total Return

The overall gain or loss on an investment over a specific period, including both capital appreciation and dividends or interest, expressed as a percentage.

Dividends

Payments made by a corporation to its shareholders, usually derived from the company's profits.