An Investor Wanting Large Returns Will Be Interested in Companies

question 23

Multiple Choice

An investor wanting large returns will be interested in companies that have

• A) high ROAs.
• B) high ROEs.
• C) high current ratios.
• D) high times interest earned.

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Definitions:

Short Run

A period of time during which at least one input of production is fixed, affecting the firm's ability to adjust production levels.

Variable Cost

A cost that depends on the quantity of output produced; the cost of a variable input.

Average Total Cost

This is the sum of all the costs of production (fixed and variable) divided by the number of units produced, providing a comprehensive understanding of production expenses.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand.