The Records of Everyday Electronics Corporation for a Particular Period

question 87

Multiple Choice

The records of Everyday Electronics Corporation for a particular period include the following: The return on equity ratio is closest to:

• A)13.2%
• B)23.8%
• C)24.0%
• D)8.4%

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Definitions:

Nominal Net Cash Flow

The total amount of cash that flows into and out of a business, not adjusted for inflation.

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period of time.

NPV

Net Present Value; a financial calculation used to determine the value of a series of future cash flows by discounting them to the present using a specific rate.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.