If a firm produces a 13 percent return on assets and also a 13 percent return on equity, then the firm: Is using its assets as efficiently as possible. May have short-term, but not long-term debt. Has an equity multiplier of 1.0. Has no net working capital. Has a debt-equity ratio of 1.0.

Depreciation for a tax-paying firm: Increases expenses and lowers taxes. Increases the net fixed assets as shown on the balance sheet. Reduces both the net fixed assets and the costs of a firm. Decreases net fixed assets, net income, and operating cash flows. Is a noncash expense that increases the net income.