A Firm Has an ROA of 12% and an ROE

question 44

Multiple Choice

A firm has an ROA of 12% and an ROE of 52%. What is the firm's equity multiplier?

• A) 0.23
• B) 4.33
• C) 1.63
• D) 2.90

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Definitions:

Unit Product Cost

The total cost to produce one unit of a product, including direct materials, direct labor, and allocated overhead.

Activity-Based Costing System

An accounting method that assigns costs to products or services based on the activities required to produce them, providing more accurate product costing.

Machine Setups

The process of preparing machinery or equipment for a specific task or production run, including adjustments and configurations.

Activity Cost Pool

A grouping of all costs associated with a particular activity, used in activity-based costing to allocate costs accurately to products or services.