Which of the Following Statements Is Most Correct

question 64

Multiple Choice

Which of the following statements is most correct?

• A) If Company A has a higher debt ratio than Company B, then we can be sure that A will have a lower times-interest-earned ratio than B.
• B) Suppose two companies have identical operations in terms of sales, cost of goods sold, interest rate on debt, and assets. However, Company A uses more debt than Company B; that is, Company A has a higher debt ratio. Under these conditions, we would expect B's profit margin to be higher than A's.
• C) The ROE of any company which is earning positive profits and which has a positive net worth (or common equity) must exceed the company's ROA.
• D) Statements a, b, and c are true.
• E) Statements a, b, and c are false.

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Definitions:

Evolutionary Approach

A perspective in psychology that interprets human behaviors and mental processes as adaptations that have evolved to increase survival and reproduction.

Mental Representations

Internal cognitive symbols that represent external reality or abstract concepts, enabling thinking and problem-solving.

Ecological Approach

An Ecological Approach examines individuals in the context of their environment, emphasizing the interaction between people and their surroundings.

Information Processing

The means by which information is encoded, stored, processed, and retrieved, particularly in the human mind or in computers.