A Firm's Net Income for the Year Was $200,000

question 5

Multiple Choice

A firm's net income for the year was $200,000. Average assets totaled $1.5 million, and average liabilities totaled $0.3 million. Return on equity was:

• A) 13.3%.
• B) 16.7%.
• C) 10%.
• D) 20%.

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Definitions:

Parallel Importing

The importation of legally produced goods without the permission of the intellectual property owner, usually to exploit price differences between markets.

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A business arrangement in which one party allows another to use its trademark, patent, or technology in exchange for a fee or royalty.

Franchising

A method of doing business wherein a franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage of gross sales or gross profits as well as the annual fees.