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:

Mental Health Services

A spectrum of services, from counseling and psychotherapy to psychiatric care, aimed at supporting individuals' mental health and well-being.

Mental Disorder

A psychological pattern or anomaly, generally associated with distress or disability, that is not considered part of normal development.

Counselors

Professionals trained to provide guidance and support in personal, social, or psychological matters.

Biomedical Approach

A methodology in healthcare that focuses on biological factors to understand and treat diseases, often emphasizing medication or surgery as treatments.