The Rate of Return on Total Assets Measures

question 19

Multiple Choice

The rate of return on total assets measures:

• A)a company's ability to meet its short-term obligations.
• B)a company's ability to repay its long-term debt.
• C)a company's success in using assets to earn a profit.
• D)a company's investing flexibility.

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Definitions:

Negotiability

The quality of a financial instrument that allows it to be transferred or assigned from one party to another in a way that the rights accompanying the instrument are also transferred.

Revised Article 3

The updated section of the Uniform Commercial Code that delineates rules and procedures for negotiable instruments.

Particular Fund Doctrine

The principle that a creditor can only lay claim to specific funds or assets of a debtor rather than the debtor's general assets.

90-Day Note

A financial instrument promising payment of a specific sum to the holder 90 days after issuance.