DL Farms Currently Has $600 in Debt for Every $1,000

question 38

Multiple Choice

DL Farms currently has $600 in debt for every $1,000 in equity. Assume the company uses some of its cash to decrease its debt while maintaining its current equity and net income. Which one of the following will decrease as a result of this action?

• A) Equity multiplier
• B) Total asset turnover
• C) Profit margin
• D) Return on assets
• E) Return on equity

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Definitions:

Punishment Strategy

A behavioral approach aimed at reducing undesirable actions by introducing negative consequences or removing positive stimuli.

Continuous

Referring to processes or operations that proceed without interruption or breaks.

Intermittent

Occurring at irregular intervals; not continuous or steady.

Social Recognition

Acknowledgment or appreciation of an individual's presence, achievements, or status by others within a social or professional group.