Firm a and Firm B Have the Same Total Assets

question 97

Multiple Choice

Firm A and Firm B have the same total assets, ROA and profit margin. However, Firm B has a higher debt ratio and interest expense than Firm A. Which of the following statements is correct?

• A) Firm B must have a higher ROE than firm A.
• B) Firm B must have a higher capital intensity ratio than Firm A.
• C) Firm B must have a higher fixed asset turnover than Firm A.
• D) Firm B must have a lower ACP than Firm A.

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Definitions:

Lateral Flexion

The bending of the neck or body toward the right or left side.

Posterior Neck Muscles

The group of muscles located at the back of the neck, including the trapezius and the splenius muscles, responsible for movements of the head and shoulders.

Abduction

Movement away from the midline.

Adduction

The movement of a body part toward the body's midline.