The Following Financial Information Pertains to Harrison Bank -What Is the Bank's ROA?
A)1

question 8

Multiple Choice

The following financial information pertains to Harrison Bank.
$\begin{array} { c r } \text { Net Profit Margin } & 12.5 \% \\\text { Net Income } & \$ 1000 \\\text { Total Assets } & \$ 62,500 \\\text { Total Equity } & \$ 6250\end{array}$
-What is the bank's ROA?

• A)1.6%
• B)10%
• C)12.8%
• D)16%
• E)None of the options is correct

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Definitions:

Short Run

A period in economics where the output is influenced by the level of production capacity, and certain economic conditions or costs cannot change.

Long Run

In economics, a period in which all inputs can be adjusted by firms, and there are no fixed costs, allowing for full industry adjustment.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, begins to decrease.

Marginal Cost

The change in total production cost that arises when the quantity produced is incremented by one unit.