If an Entity Is Able to Earn More on Borrowings

question 44

Multiple Choice

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

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

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Definitions:

Cognitive

Relating to mental activities such as thinking, understanding, learning, and remembering.

Loving Relationship

A deep and affectionate bond between individuals, characterized by warmth, care, and mutual respect.

Government Benefits

Forms of financial assistance or services provided by the government to individuals, families, and organizations qualifying under specific criteria.

Lifelong Commitment

Refers to a long-term dedication or pledge to a cause, activity, or relationship that spans the entirety of an individual's life.