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QUESTION: CATHERINE'S CONSULTING HAS NET INCOME OF $4,400 AND TOTAL EQUITY OF $39,450. THE DEBT-EQUITY RATIO IS 1 AND THE PLOWBACK RATIO IS 40 PERCENT. WHAT IS THE RETURN ON ASSETS? QUESTION: AL'S MARKETS EARNS $0.12 IN PROFIT FOR EVERY $1 OF EQUITY AND BORROWS $0.65 FOR EVERY $1 OF EQUITY. WHAT IS THE FIRM'S RETURN ON ASSETS? A) 12.00 PERCENT B) 7.27 PERCENT C) 8.33 PERCENT D) 15.15 PERCENT E) 13.75 PERCENT

QUESTION: CATHERINE'S CONSULTING HAS NET INCOME OF $4,400 AND TOTAL EQUITY OF $39,450. THE DEBT-EQUITY RATIO IS 1 AND THE PLOWBACK RATIO IS 40 PERCENT. WHAT IS THE RETURN ON ASSETS? QUESTION: AL'S MARKETS EARNS $0.12 IN PROFIT FOR EVERY $1 OF EQUITY AND BORROWS $0.65 FOR EVERY $1 OF EQUITY. WHAT IS THE FIRM'S RETURN ON ASSETS? A) 12.00 PERCENT B) 7.27 PERCENT C) 8.33 PERCENT D) 15.15 PERCENT E) 13.75 PERCENT

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION: CATHERINE'S CONSULTING HAS NET INCOME OF $4,400 AND TOTAL EQUITY OF $39,450. THE DEBT-EQUITY RATIO IS 1 AND THE PLOWBACK RATIO IS 40 PERCENT. WHAT IS THE RETURN ON ASSETS? QUESTION: AL'S MARKETS EARNS $0.12 IN PROFIT FOR EVERY $1 OF EQUITY AND BORROWS $0.65 FOR EVERY $1 OF EQUITY. WHAT IS THE FIRM'S RETURN ON ASSETS? A) 12.00 PERCENT B) 7.27 PERCENT C) 8.33 PERCENT D) 15.15 PERCENT E) 13.75 PERCENT
Transcribed Image Text:QUESTION: CATHERINE'S CONSULTING HAS NET INCOME OF $4,400 AND TOTAL EQUITY OF $39,450. THE DEBT-EQUITY RATIO IS 1 AND THE PLOWBACK RATIO IS 40 PERCENT. WHAT IS THE RETURN ON ASSETS? QUESTION: AL'S MARKETS EARNS $0.12 IN PROFIT FOR EVERY $1 OF EQUITY AND BORROWS $0.65 FOR EVERY $1 OF EQUITY. WHAT IS THE FIRM'S RETURN ON ASSETS? A) 12.00 PERCENT B) 7.27 PERCENT C) 8.33 PERCENT D) 15.15 PERCENT E) 13.75 PERCENT
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