One Important Difference Between Return on Assets (ROA)and Return on Common

question 66

Multiple Choice

One important difference between return on assets (ROA) and return on common shareholder's equity (ROCE) is that:

• A) ROA does not differentiate based on how a company finances its assets; ROCE does.
• B) ROA does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROCE does.
• C) ROCE does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROA does.
• D) ROCE does not differentiate based on how a company finances its assets; ROA does.

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Definitions:

Retroactive Interference

A memory phenomenon where new information learned interferes with the ability to recall old information.

Encoding Specificity

The principle that the retrieval of information is improved when the context present at encoding and retrieval is the same.

Von Restorff Effect

A psychological principle that items which stand out are more likely to be remembered than other items.

Episodic Memory

The memory of autobiographical events that can be explicitly stated, including times, places, and associated emotions.