A Company's Return on Assets Will Equal Its Return on Equity

question 76

True/False

A company's return on assets will equal its return on equity if the after-tax cost of debt equals the return on assets.

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Definitions:

Marginal Product

The increase in output resulting from an additional unit of input, while keeping other inputs constant.

Total Product

The total quantity of output produced by a firm for a given quantity of inputs.

Maximize Profit

The strategy or process aimed at achieving the highest possible profit from business activities, considering revenues and expenses.

Marginal Productivity

A measure of the extra amount of output that is produced when a unit of input (like labor or capital) is added, with all other inputs held constant.