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  2. Topic
    Business
  3. Study Set
    Accounting for Non Specialists
  4. Exam
    Exam 8: Analysis and Interpretation of Financial Statements
  5. Question
    A Firm Has Total Assets of $900,000 and Total Liabilities
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A Firm Has Total Assets of $900,000 and Total Liabilities

Question 2

Question 2

Multiple Choice

A firm has total assets of $900,000 and total liabilities of $400,000. There are no preference shareholders. Earnings before interest and taxes are $100,000. Interest is $21,000 and taxes are $34,000. The return on ordinary shareholders' funds is:


A) 8.0%.
B) 12.5%.
C) 9.0%.
D) 3.8%.

Correct Answer:

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