Return on Equity Is Calculated as Net Income Divided by Average

question 57

True/False

Return on equity is calculated as net income divided by average stockholders' equity.

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Definitions:

Diminishing Marginal Product

The principle where the incremental output of a production process decreases as the amount of a single factor of production is incrementally increased, holding all other factors constant.

Inverted Production Function

A concept where inputs and outputs in a production process are reversed in analysis, possibly examining the relationship of output levels to required inputs.

Total Product

The overall quantity of output that a firm produces, usually within a given period of time.

Marginal Product

The rise in output due to an extra unit of input.