If an Auditor Was Interested in Determining a Client Firm's

question 73

Multiple Choice

If an auditor was interested in determining a client firm's ability to generate income from its investments, the best ratio to calculate would be _________.

• A)the times interest earned
• B)debt to assets ratio
• C)return on assets
• D)return on equity

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Definitions:

Dominant Strategy

In game theory, a strategy that is the best for a player regardless of what strategies other players use, leading to an optimal outcome for the player employing it.

Optimal

The most favorable condition or level of efficiency at which the desired outcome or operation is most effective or functional.

Opponent

An individual or group that competes against or disagrees with another in a contest, conflict, or debate.

Cooperative Advertising

A cost-sharing arrangement whereby both a supplier and retailer contribute to the advertising cost to increase demand for a product.