Use the Following Information for ECE Incorporated

question 35

Multiple Choice

Use the following information for ECE incorporated:

-If ECE's net profit margin is 8%,then ECE's return on equity (ROE) is:

• A)10%.
• B)12%.
• C)24%.
• D)30%.

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Definitions:

Marginal Social Benefits

The extra advantage obtained by society from the consumption of an additional unit of any product or service.

Positive Externalities

Benefits that are enjoyed by third-parties as a result of an economic transaction or activity, without them directly participating in the transaction.

Pigouvian Tax

A tax imposed on activities that generate negative externalities, aimed at correcting an inefficient market outcome.

Marginal Social Benefits

The incremental benefit the public receives from consuming an additional unit of a good or service.