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.

---

Definitions:

Standard Labor-Hours

The predetermined amount of labor-hours expected to be required to produce a unit of product or perform a task.

Actual Output

The real production volume or amount of work done, as opposed to planned or theoretical outputs.

Manufacturing Overhead

Costs that are incurred in the manufacturing process other than direct materials and direct labor, such as utilities, depreciation, and maintenance of equipment.

Denominator Activity Levels

Denominator activity levels refer to the levels of activity used to allocate fixed costs to products or services under activity-based costing or other costing methodologies.