Under what situation will return on equity be higher than return on investment? a. When assets exceed liabilities. b. When the debt to equity ratio is greater than 1.0. c. When net income is higher than it was in the previous year. d. When a company earns more on borrowed money than the interest it must pay.
Under what situation will return on equity be higher than return on investment? a. When assets exceed liabilities. b. When the debt to equity ratio is greater than 1.0. c. When net income is higher than it was in the previous year. d. When a company earns more on borrowed money than the interest it must pay.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Under what situation will return on equity be higher than
a. When assets exceed liabilities.
b. When the debt to equity ratio is greater than 1.0.
c. When net income is higher than it was in the previous year.
d. When a company earns more on borrowed money than the interest it must pay.
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