Given the Following Data: EBIT = 400; NI = 100;

question 52

Multiple Choice

Given the following data: EBIT = 400; NI = 100; Average Equity = 1000, calculate the
ROE (Return on Equity) :

• A) 10%
• B) 12%
• C) 7.5%
• D) None of the above

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Definitions:

Residual Value

Residual Value is the estimated amount that an asset will realize upon its sale at the end of its useful life.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life, providing a consistent annual depreciation expense.

Residual Value

The anticipated salvage value an asset will have after its period of use has ended.

Depreciation Expense

Spreading out the expense of a solid asset over the period it's expected to be used.