The Following Information Is Available for Aerius Corporation for the Current

question 34

Multiple Choice

The following information is available for Aerius Corporation for the current year:

$\begin{array} { l r } \text { Net income } & \$ 160,000 \\\text { Preferred dividends } & 30,000 \\\text { Interest expense } & 18,000 \\& \\\text { Beginning of year: } & \\\text { Total assets } & 900,000 \\\text { Total liabilities } & 300,000 \\\text { Total common shareholders' equity } & 375,000 \\& \\\text { End of year: } & \\\text { Total assets } & 950,000 \\\text { Total liabilities } & 350,000 \\\text { Total common shareholders' equity } & 400,000\end{array}$
The return on assets for Aerius Corporation is:

• A) 18.7%
• B) 17.3%
• C) 19.8%
• D) 19.2%

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Definitions:

Substitution Bias

The error made in inflation measurement due to changes in consumer purchasing behavior as they substitute cheaper goods for more expensive ones.

Quality

The degree to which a product or service meets certain standards or satisfies specified criteria, often related to excellence or superiority in performance.

Price Index

A statistical measure that shows changes in the price level of a basket of consumer goods and services over time, indicating inflation or deflation.

Real Terms

A measurement that adjusts nominal values to account for changes in price levels, allowing for the comparison of purchasing power over time.