A fiRm Has an ROA of 8%, Sales of $100

question 212

Multiple Choice

A firm has an ROA of 8%, sales of $100, and total assets of $71. What is its profit margin?

• A) 1.3%
• B) 4.3%
• C) 5.7%
• D) 10.7%
• E) 16.7%

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Definitions:

Equally Likely Criterion

A decision-making principle where all outcomes are considered to have the same probability of occurring.

Perfect Information

Perfect information refers to a theoretical scenario where all participants in a market have complete and instantaneous knowledge of all market conditions and variables, leading to an optimal decision-making environment.

Expected Value

A calculation in probability theory that represents the average outcome when the experiment is repeated a large number of times.

Conditional Probabilities

The likelihood of an event or outcome occurring, given that another event has already occurred.