Which of the Following Statements Regarding the Asset Turnover Ratio

question 105

Multiple Choice

Which of the following statements regarding the asset turnover ratio is true?

• A)The asset turnover ratio compares the amount of sales revenue for the period to the book value of assets at the end of the period.
• B)An asset turnover ratio must be less than 1.
• C)The higher the ratio,the less efficiently the company is using its assets.
• D)This ratio is not expressed as a percentage.

Understand the application of yield pricing in differential analysis.

Recognize the implications of demand exceeding production capacity (bottleneck issues).

Calculate and interpret differential cost and revenue for decision making.

Understand opportunity costs and their impact on financial decisions.

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Definitions:

Inconsistency

The state of being irregular or not remaining the same over time.

Attitudes

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.

Behavior

The actions or reactions of an individual in response to external or internal stimuli.

Actor-observer Effect

A social psychology concept suggesting that people tend to attribute their own actions to external situations while attributing others' actions to their personalities.