A Company Has Return on Assets of 10

question 90

Multiple Choice

A company has return on assets of 10%. Return on sales are 5%. The leverage ratio is 4.0. Following DuPont analysis, what is return on equity?

• A)5%
• B)10%
• C)40%
• D)20%

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Definitions:

Price Of Resource

The financial cost required to obtain or use a particular resource.

Producers

Entities or individuals that create goods or provide services, playing a crucial role in the supply side of an economy.

Resource Prices

refer to the costs associated with procuring the natural, human, and capital inputs required for the production of goods and services.

Incentive

A factor, often a reward or penalty, that motivates an individual or entity to act in a certain way.