Consider the Following Data for Three Divisions of a Company,X,Y,and

question 95

Multiple Choice

Consider the following data for three divisions of a company,X,Y,and Z:
The return on investment (ROI) for Division X is:

• A)8.0%.
• B)12.0%.
• C)20.0%.
• D)25.0%.
• E)40.0%.

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Definitions:

Debt To Total Assets

A ratio that indicates the proportion of a company's assets financed through debt.

Liquidity

The measure of how easily an asset or security can be converted into ready cash without affecting its market price.

Profitability

A measure of the ability of a company or business unit to generate earnings relative to its revenue, assets, equity, or other financial metrics over a certain period of time.

Price-earnings Ratio

A financial metric that measures a company's market share price relative to its earnings per share, indicating investor sentiment about future earnings.