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
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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
If Moon Corporation has an increase in sales, which of the following would result in no change in its EBIT margin()
A proportional increase in its net income
B. A proportional decrease in its EBIT
C. A proportional increase in its EBIT
D. An increase in its operating expenses