A Difficulty with Increasing a Retailer's Return on Net Worth

question 24

Multiple Choice

A difficulty with increasing a retailer's return on net worth through high financial leverage is the ________.

• A) possible loss in sales due to being out-of-stock on desirable merchandise
• B) negative effect on net profit due to high inventory levels
• C) uncertainty of repayment of interest and debt
• D) high costs of stocking inventory

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Definitions:

Security

A financial instrument designated as a note, stock, or bond or any other instrument named in the Securities Act of 1933.

Permanent Resident

An individual who has been granted the right to live permanently in a country other than their native country, but is not a citizen of that country.

Registration Process

The procedure of officially recording something or someone's details on an official list.

Imprisonment

The act of confining someone in a prison or similar facility as punishment for committing a crime.