Which of the Following Statements Best Describes the Term "Return

question 75

Multiple Choice

Which of the following statements best describes the term "return on equity" (ROE) ?

• A)ROE is a measure of the effectiveness of the entity in using the assets provided by owners to generate net income.
• B)ROE is the measure of the amount of dividends that have been returned to the shareholders.
• C)ROE is measure of how effective the entity is at controlling expenses.
• D)ROE is the measure of the risk and liquidity of an entity.

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Definitions:

Intangible Benefits

Non-monetary advantages that cannot be easily quantified or directly measured, such as brand recognition, customer loyalty, and employee satisfaction.

Automated Equipment

Machinery and tools that operate independently or with minimal human intervention, often used to improve efficiency in manufacturing processes.

Financially Attractive

Describes investments, projects, or opportunities that are expected to provide a high return relative to their cost.

Annual Cash Inflow

The total amount of money received by a business or project within a year from all sources.