Denver Systems Has Total Assets of $1,000,000; Common Equity of $400,000;

question 5

Multiple Choice

Denver Systems has total assets of $1,000,000; common equity of $400,000; a gross profit of $800,000; total operating expenses of $620,000; interest expense of $20,000; income taxes of $74,000; and preferred dividends of $30,000.What is Denver Systems' return on equity?

• A) 7.5%
• B) 20.0%
• C) 21.5%
• D) 14.0%

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Definitions:

Uniform Procedures

Standardized methods or protocols that are implemented consistently across different situations or environments.

Administration

The process or activity of running a business or organization, including the management of operations and decision-making.

Test Norms

Statistical standards that describe the distribution of scores obtained by a specific group of test takers, which serve as a reference point to interpret individual scores.

Test Reliability

The degree to which an assessment tool produces stable and consistent results.