What Is Primarily Responsible for the Potential Distortion Among the ROA

question 91

Multiple Choice

What is primarily responsible for the potential distortion among the ROA of different firms when net income is used in the numerator of ROA?

• A) Firms have different dividend payout ratios.
• B) Some firms use fully depreciated assets.
• C) Financial leverage varies among firms.
• D) Unprofitable firms will not have any tax liability.

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An American supermarket chain specializing in organic and natural foods.

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