If Brewster's Produces a Return on Assets of 14 Percent

question 13

Multiple Choice

If Brewster's produces a return on assets of 14 percent and also a return on equity of 14 percent,then the firm

• A)has no net working capital.
• B)is using its assets as efficiently as possible.
• C)has no debt of any kind.
• D)also has a current ratio of 14.
• E)has an equity multiplier of 1.4.

---

Definitions:

Mean Square Error

The unbiased estimate of the variance of the error term s2. It is denoted by MSE or s2.

Estimated Regression Equation

An equation generated through regression analysis that predicts the dependent variable based on the values of independent variables.

Regression Equation

An equation derived from regression analysis that represents the statistical relationship between one or more predictor variables and the response variable.

Regression Model

A form of predictive modelling technique which investigates the relationship between a dependent (target) and independent variable(s) (predictor).