Question

Since the ROA measures the firm's effective utilization of assets (without considering how these assets are...

Since the ROA measures the firm's effective utilization of assets (without considering how these assets are financed), two firms with the same EBIT must have the same ROA.

True or False?

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Answer #1

The example shows that the way in which assets are financed affects the ROA of the firms by affecting the net income of the firm .

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