What Will Be Gamma Inc

question 2

Multiple Choice

What will be Gamma Inc.'s return on equity if total asset turnover is 0.85,operating profit margin is 0.15,two-thirds of its assets are financed through equity,and debt burden is 0.6?

• A) 9.56%
• B) 11.48%
• C) 16.96%
• D) 38.25%

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Definitions:

Accord And Satisfaction

A legal contract whereby two parties agree to discharge a tort claim, contract, or disputed claim by an agreement (the accord) and payment (the satisfaction) that differs from the original agreement.

Liquidated Debt

A fixed and settled debt amount that is acknowledged by both the debtor and the creditor.

Preexisting Duty

A legal principle that states a promise to do something that one is already legally obligated to do is not sufficient consideration for a new contract.

Unilateral Contract

A promise made by one party in exchange for the performance of a task or action by another party.