A retailer's return on assets equals 5 percent. Its financial leverage is 4. What is its return on net worth?

A retailer's return on assets equals 5 percent. Its financial leverage is 4. What is its return on net worth?

A retailer's return on assets equals 5 percent. Its financial leverage is 4. What is its return on net worth?


a. 10 percent

b. 16 percent

c. 20 percent

d. The answer cannot be determined from the information provided


Answer: C


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