We Calculate Return on Equity (ROE)by Dividing Profit by Average

question 24

True/False

We calculate return on equity (ROE)by dividing profit by average shareholders' equity.

---

Definitions:

Selling Price

The amount of money for which a product or service is sold to the customer.

Principal

An individual or entity that authorizes an agent to act on their behalf in legal or financial matters.

NPV Criterion

A financial metric used to assess the profitability of an investment, calculating the net present value of all cash flows associated with it.

Future Cash Flows

Estimates of the amount of money expected to be received or paid out in the future through investment, business operations, or other financial activities.