The Balance Sheets at the End of Each of the First

question 38

Multiple Choice

The balance sheets at the end of each of the first two years of operations indicate the following: If net income is $115,000 and interest expense is $30,000 for 2012 what is the rate earned on total assets for 2012 (round percent to one decimal point) ?

• A) 9.3%
• B) 10.1%
• C) 8.0%
• D) 7.4%

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Definitions:

Monitoring

Monitoring involves the continuous or regular observation and checking of activities or processes to ensure they are going as planned or meeting standards.

Moral Hazard

The situation in which one party is inclined to take risks because the negative consequences of the risk will be borne by another party.

Money-Back Guarantee

A money-back guarantee is a promise from a seller to refund a buyer's purchase price if the product sold does not satisfy the buyer's expectations.

Pairwise Voting

A voting system where candidates are compared in pairs, and the winner is determined by who wins the most individual comparisons.