If a Firm Produces a 12 Percent Return on Assets

question 12

Multiple Choice

If a firm produces a 12 percent return on assets and also a 12 percent return on equity,then the firm:

• A)has no net working capital.
• B)is using its assets as efficiently as possible.
• C)has no debt of any kind.
• D)also has a current ratio of 12.
• E)has an equity multiplier of 1.2.