If a Firm Produces a 10% Return on Assets and Also

question 113

Multiple Choice

If a firm produces a 10% return on assets and also a 10% return on equity,then the firm:

• A) has no debt of any kind.
• B) is using its assets as efficiently as possible.
• C) has no net working capital.
• D) also has a current ratio of 10.
• E) has an equity multiplier of 2.

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