If a Firm Produces a Twelve Percent Return on Assets

question 35

Multiple Choice

If a firm produces a twelve percent return on assets and also a twelve percent return on equity,then the firm:

• A)may have short-term, but not long-term debt.
• B)is using its assets as efficiently as possible.
• C)has no net working capital.
• D)has a debt-equity ratio of 1.0.
• E)has an equity multiplier of 1.0.

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Definitions:

Workplace Governance

Systems and processes implemented in a work environment to manage operations, ensure legal compliance, and promote ethical standards.

Democratic Society

A form of society that is based on the principles of democracy, where power is exercised either directly by the people or through elected representatives.

Workplace Governance

The system of rules, practices, and processes by which a workplace is directed and controlled, encompassing the mechanisms through which the interests of various stakeholders are balanced.

Terms and Conditions

A set of regulations and guidelines which are agreed upon between parties, often used in contracts and agreements to define the rights, obligations, and limitations of each party.