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A company borrows $0.70 for every $1 of equity. They earn $0.25 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 8.85 percent b. 11.25 percent c. 14.71 percent d. 19.23 percent e. 35.71 percent

A company borrows $0.70 for every $1 of equity. They earn $0.25 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 8.85 percent b. 11.25 percent c. 14.71 percent d. 19.23 percent e. 35.71 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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A company borrows $0.70 for every $1 of equity. They earn $0.25 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 8.85 percent b. 11.25 percent c. 14.71 percent d. 19.23 percent e. 35.71 percent
Transcribed Image Text:A company borrows $0.70 for every $1 of equity. They earn $0.25 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 8.85 percent b. 11.25 percent c. 14.71 percent d. 19.23 percent e. 35.71 percent
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