An Increase in Return on Equity (ROE), Over the Three

question 47

True/False

An increase in return on equity (ROE), over the three most recent years reported, can be a signal that a company has not invested in modernization of plant and equipment or research and development, which in the long run might lead to declining profits.

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Definitions:

Tying Arrangement

A business practice where a seller requires the purchase of a secondary product or service in addition to a primary product or service.

Vacuum Cleaners

Electrical appliances used for cleaning floors and other surfaces by suctioning up dust and dirt.

Sherman Act

A landmark federal statute in the United States antitrust law passed by Congress in 1890 which prohibits monopolistic practices and promotes competition.

Horizontal Price Fixing

Horizontal price fixing is an unlawful practice where businesses at the same level of the market agree to set prices at a certain level, reducing competition.