Frederico's Has a Profit Margin of 6%,a Return on Assets

question 20

Multiple Choice

Frederico's has a profit margin of 6%,a return on assets of 8%,and an equity multiplier of 1.4. What is the return on equity?

• A) 6.7%
• B) 8.4%
• C) 11.2%
• D) 14.6%
• E) 19.6%

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Definitions:

Tens Of

An expression suggesting an approximate quantity or range, often used in the context of counting or estimating.

Liens

Legal claims against assets that are typically used as collateral to secure loans.

Accounts Receivable

Amounts due from clients to a business for received goods or services that remain unpaid.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.