Problemfirm a and firm b have the same total assets roa and, Ask an Expert

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Problem:

Firm A and Firm B have the same total assets, ROA and profit margin (greater than 0). However, Firm B has a higher debt ratio and interest expense than Firm A. Which of the following statements is correct?

Firm B must have a lower ACP than Firm A.

Firm B must have a higher capital intensity ratio than Firm A.

Firm B must have a higher ROE than firm A.

Firm B must have a higher fixed asset turnover than Firm A.

Note: Please describe comprehensively and provide step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147630

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