Return on Assets Is Always a Larger Number Than the Return

question 25

True/False

Return on assets is always a larger number than the return on equity.

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Definitions:

Fixed Costs

Business expenses that remain constant regardless of changes in production volume, such as rent, salaries, and loan repayments.

Variable Cost

Costs that vary in direct proportion to changes in the level of production or sales.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and equipment leases.

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced.