A Firm Currently Has $600 in Debt for Every $1,000

question 65

Multiple Choice

A firm currently has $600 in debt for every $1,000 in equity.Assume the firm uses some of its cash to decrease its debt while maintaining its current equity and net income.Which one of the following will decrease as a result of this action?

• A)equity multiplier
• B)total asset turnover
• C)profit margin
• D)return on assets
• E)return on equity

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Definitions:

Accidental Poisoning

The unintentional ingestion, inhalation, or absorption through the skin of harmful substances, leading to health complications or death.

Cerebellum

A major feature of the brain, responsible for regulating motor movements, balance, and coordination.

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The front part of the frontal lobe in the brain, associated with decision making, complex cognitive behavior, personality expression, and moderating social behaviour.

Corpus Callosum

A broad band of nerve fibers joining the two hemispheres of the brain, facilitating communication between them.