If a Firm Has a Positive Tax Rate,a Positive Operating

question 23

Multiple Choice

If a firm has a positive tax rate,a positive operating ROA,and the interest rate on debt is the same as the operating ROA,then operating ROA will be _________.

• A) greater than zero but it is impossible to determine how operating ROA will compare to ROE
• B) equal to ROE
• C) greater than ROE
• D) less than ROE

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Definitions:

Physical Resources

Tangible assets such as buildings, machinery, and raw materials that an organization uses to conduct its business.

Visibility

The degree to which an entity's presence, actions, or status is known and perceivable by others.

Contingency

The dependence on chance or on the fulfillment of a condition; in management, it refers to the idea that there is no one best way to organize or lead, and that it will depend on various situational factors.

Networking

Networking is building and maintaining professional or social contacts to exchange information, support, and opportunities.