Assume the Following Data: EBIT = 400; Net Income =

question 35

Multiple Choice

Assume the following data: EBIT = 400; Net income = 100; Equity = 1,000. Calculate the ROE (return on equity) .

• A)10.0 percent
• B)12.0 percent
• C)7.5 percent
• D)30.0 percent

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Definitions:

Possess

To have or hold property, assets, or rights, either legally or physically.

Profit

The financial gain achieved when the revenue gained from a business activity exceeds the expenses, costs, and taxes associated with sustaining the activity.

Tenancy In Common

Joint ownership of property in which each party owns an undivided interest that passes to his or her heirs at death.

Heirs

Individuals legally entitled to receive a portion of a deceased person's estate.