A Firm Currently Has $600 in Debt for Every $1,000

question 65

Multiple Choice

A firm currently has $600 in debt for every $1,000 in equity.Assume the firm uses some of its cash to decrease its debt while maintaining its current equity and net income.Which one of the following will decrease as a result of this action?

• A)equity multiplier
• B)total asset turnover
• C)profit margin
• D)return on assets
• E)return on equity

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Definitions:

Perception Of Pain

The subjective interpretation and experience of discomfort or suffering that can have physical and emotional components.

Gustatory System

The sensory system responsible for the perception of taste and flavor.

Gestalt Principles

Theories of visual perception developed by German psychologists, which describe how people tend to organize visual elements into groups or unified wholes.

Psychoanalytic Principles

Foundational concepts in psychoanalytic theory involving the influence of unconscious processes, childhood experiences, and defense mechanisms on behavior and thinking.