A Firm with Sales of $1,000,000, Net Profits After Taxes

question 134

Multiple Choice

A firm with sales of $1,000,000, net profits after taxes of $30,000, total assets of $1,500,000, and total liabilities of $750,000 has a return on equity of

• A) 20 percent.
• B) 15 percent.
• C) 3 percent.
• D) 4 percent.

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Definitions:

Congeneric Merger

A type of acquisition where two companies operate in the same industry but do not offer the same products or services.

Combining Companies

The process of merging or acquiring companies to enhance competitive advantage, expand market share or diversify offerings.

Related Businesses

Entities or companies that are connected by activities, products, services, or market sectors.

Oligopoly

A market structure characterized by a few firms dominating the market, which can lead to limited competition and potentially higher prices for consumers.