Which of the Following Statements Regarding the Fixed Asset Turnover

question 9

Multiple Choice

Which of the following statements regarding the fixed asset turnover ratio is incorrect?

• A)The numerator is net operating income.
• B)The denominator is average net fixed assets.
• C)The ratio is used to assess a company's effectiveness in generating sales from its fixed assets.
• D)The ratio increases when a company sells a factory building for a gain.

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Definitions:

Insider Trading

Insider trading involves buying or selling a security by someone who has access to material, nonpublic information about the security.

Alcohol Addiction

A chronic disease characterized by uncontrolled drinking and preoccupation with alcohol, despite negative consequences.

Effectiveness of Punishment

the degree to which punitive measures achieve the desired outcome of deterring undesirable behaviors or enforcing compliance.

Undesirable Behavior

Actions or conduct considered inappropriate or harmful in a particular context or environment.