The Tax Burden of the Firm Is

question 64

Multiple Choice

The tax burden of the firm is .4,the interest burden is 0.65,the return on sales is 0.05,the asset turnover is 0.90,and the leverage ratio is 1.35.What is the ROE of the firm?

• A) 1.58%
• B) 5.68%
• C) 12.20%
• D) 13.33%

---

Definitions:

Midpoint Method

A technique used in economics to measure the elasticity of a variable without the influence of the starting and ending points.

Price Elasticity

A measure of how sensitive the quantity demanded of a good is to a change in its price.

Quantity Demanded

The overall volume of a good or service buyers are prepared and capable of acquiring at a designated price during a specified period.

Time Horizon

The length of time over which an investment or a project is intended or expected to occur.