Your management team gets presented with an investment opportunity. You can purchase bonds with a 7% return or use invest in a new factory. Which ratio should you use to see which option to choose?

answer
The correct answer is 3. To measure which option to take, you'll want to find what your return on assets are to see if it will produce a higher rate of return than the bond.
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This question is part of our Principles of Finance course.

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