Which of the Following Can Be Used to Compute the Return

question 91

Multiple Choice

Which of the following can be used to compute the return on equity?
I.Profit margin × Return on assets
II.Return on assets × Equity multiplier
III.Net income/Total equity
IV.Return on assets × Total asset turnover

• A)I and III only
• B)II and III only
• C)II and IV only
• D)I, II, and III only
• E)I, II, III, and IV

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Definitions:

Per Annum

An annual occurrence or rate, indicating something that happens or is calculated over the course of a year.

Variable Rate

An interest rate that can fluctuate over the duration of a loan or savings account, based on the market or an index.

Preceding August

Indicates a time period or events that occurred before the month of August.

Payment Stream

A series of payments made or received over time, usually as part of a financial agreement such as a mortgage or annuity.