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Denver Systems Has Total Assets of $1,000,000; Common Equity of $400,000;

Question 5

Multiple Choice

Denver Systems has total assets of $1,000,000; common equity of $400,000; a gross profit of $800,000; total operating expenses of $620,000; interest expense of $20,000; income taxes of $74,000; and preferred dividends of $30,000.What is Denver Systems' return on equity?


A) 7.5%
B) 20.0%
C) 21.5%
D) 14.0%

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