One important difference between return on assets (ROA) and return on shareholder's equity (ROE) is

a.

ROA does not differentiate based on how a company finances its assets, ROE does.

b.

ROA does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles, ROE does.

c.

ROE does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles, ROA does.

d.

ROE does not differentiate based on how a company finances its assets, ROA does.

A firm's balance sheet shows the following:

Assets $500,000; Liabilities $600,000; Shareholder's Capital $50,000; Owner's Equity ($100,000).

The Retained Profit/Loss for the firm is:

a.($50,000)

b.$100,000

c.$150,000

d.($150,000)

Which of the following isnotan effect of capitalization?

A.Capitalization usually reduces net income.

B.Capitalization usually yields a smoother net income.

C.Capitalization usually decreases the volatility of the return on investment.

D.Capitalization usually increases net income.

I think should be A D D but I do not know the reason.