If an Entity Is Able to Earn More on Borrowings

question 34

Multiple Choice

If an entity is able to earn more on borrowings than the cost of those borrowings the return on equity will:

• A) vary.
• B) increase.
• C) decrease.
• D) be unchanged.

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Definitions:

State Capitals

The cities designated as the administrative centers of the states of a country.

Agricultural Products

Goods produced through farming and agriculture, including crops like wheat, corn, and rice, as well as livestock.

Textiles

Materials made from fibers, threads, or fabrics, produced through weaving, knitting, or other manufacturing processes, used for clothing, furnishings, and various industrial applications.

Weapons

Tools or devices designed for inflicting harm or physical damage, used in conflict or hunting, ranging from simple implements to complex machinery.