Profitability and Asset Management Ratios You Are Thinking of Investing

question 20

Multiple Choice

Profitability and Asset Management Ratios You are thinking of investing in Wave Runnerz,Inc.You have only the following information on the firm at year-end 2013: net income = $10 million,total debt = $65 million,and debt ratio = 35 percent.What is Wave Runnerz's ROE for 2013?

• A)8.28 percent
• B)15.38 percent
• C)28.57 percent
• D)43.96 percent

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Definitions:

Principle Of Closure

A Gestalt psychology principle suggesting that individuals perceive objects as whole, even when they are incomplete because our minds fill in missing details.

Perceptual Constancy

The recognition that objects are constant and unchanging even though sensory input about them is changing.

Size Constancy

The perceptual stability of the size of objects in view, despite variations in the size of the image on the retina due to changes in viewing distance.

Apparent Movement

The perception that a stationary object is moving.