A Firm Has a Net Profit/pretax Profit Ratio of 0

question 70

Multiple Choice

A firm has a net profit/pretax profit ratio of 0.6, a leverage ratio of 1.5, a pretax profit/EBIT of 0.7, an asset turnover ratio of 4, a current ratio of 2, and a return-on-sales ratio of 6%. Its ROE is ________.

• A) 7.56%
• B) 15.12%
• C) 20.16%
• D) 30.24%

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Definitions:

Per Capita Consumption

Measures the average amount of a good or service consumed per person within a population over a specific period.

Consumer Surplus

The discrepancy between the sum consumers intend to pay for a product or service and the sum they really pay.

Power Transmission Wire

Conductors used in power transmission systems to carry electricity over long distances from power plants to electrical substations.

Domestic Demand

The total demand for goods and services within a country's borders.