Since ROA Measures the Firm's Effective Utilization of Assets (Without

question 15

True/False

Since ROA measures the firm's effective utilization of assets (without considering how these assets are financed), two firms with the same EBIT must have the same ROA.

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Definitions:

Developing Country

A nation with a lower level of industrialization, a lower standard of living, and a lower Human Development Index (HDI) compared to developed countries.

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

Privatization

The process of transferring ownership or control of a business or service from the government to private individuals or organizations.

Transitional Economies

These are countries changing from a centrally planned economy towards a more market-oriented economy.