Question
Select all true statements Question 5 options: Return on Equity is affected by depreciation and interest expense Return on Equity indicates how many sales are
Select all true statements
Question 5 options:
| Return on Equity is affected by depreciation and interest expense |
| Return on Equity indicates how many sales are generated for a dollar of assets |
| Return on Assets is always greater than 1 |
| Absent any other information, a high ROE is preferred to a low ROE |
| Net profit margin states net income as a percentage of sales (or revenues) |
Select all true statements
Question 6 options:
| The DuPont equation gives insight on what impacts ROE |
| The DuPont equation decomposes Assets into equity and leverage |
| According to the DuPont equation, out of two firms with the same ROA, the one with higher financial leverage will produce the higher ROE |
| The DuPont equation illustrates that a firm's ROE depends on profit margin, total asset turnover and financial leverage |
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