The firm’s equity multiplier measures()
A. the value of assets held per dollar of shareholder equity
B. the return the firm has earned on its past investments
C. the firm’s ability to sell a product for more than the cost of producing it
D. how efficiently the firm is utilizing its assets to generate sales
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Suppose Novak Company experienced a reduction in its ROE over the last year. This fall could be attributed to()
A. an increase in net profit margin
B. a decrease in asset turnover
C. an increase in leverage
D. a decrease in Equity
Which of the following formulas regarding NPV is INCORRECT()
A. NPV + PV(benefits) = PV(Cost)
B. NPV + PV(costs) = PV(benefits)
C. NPV = PV(All project cash flows)
D. All of the above
Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now
A. invest in this opportunity since the NPV is positive
B. not invest in this opportunity since the NPV is positive
C. invest in this opportunity since the NPV is negative
D. not invest in this opportunity since the NPV is negative
The DuPont Identity expresses the firm’s ROE in terms of()
A. profitability, asset efficiency, and leverage
B. valuation, leverage, and interest coverage
C. profitability, margins, and valuation
D. equity, assets, and liabilities