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Management · Q293

Financial Management

Graduate and Post Graduate · Management · question 293

Q293

Company low earning power and high interest cost cause financial changes which have

A.
high return on equity
B.
high return on assets
Answer
C.
low return on assets
D.
low return on equity

Answer: Option B

Solution

Answer: Option B
Solution:
Company low earning power and high interest cost cause financial changes which have high return on assets. The higher the ROA number, the better, because the company is earning more money on less investment.