A Company Is Effectively Leveraging When

question 123

Multiple Choice

A company is effectively leveraging when:

• A)The return on assets exceeds the return on shareholders' equity.
• B)The return on shareholders' equity exceeds the return on assets.
• C)The return on shareholders' equity is increasing.
• D)The return on assets is increasing.

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Definitions:

Short Run

A period in economics during which the quantities of at least one input, such as plant size, cannot be changed.

Variable

An element, feature, or factor that is liable to vary or change.

Marginal Product

This measures the additional output that is produced by adding one more unit of a specific input, keeping all other inputs constant.

Total Output

The entire quantity of goods or services produced by an individual, firm, industry, or economy within a specified period.