Which of the Following Statements Is Not True Regarding Net

question 40

Multiple Choice

Which of the following statements is not true regarding net profit margin?

• A)If a company's net profit margin increases from 15% to 20% this would be considered an improvement in profitability.
• B)A company with a net profit margin of 10% may be evaluated differently depending upon which industry it is in.
• C)A company with a net profit margin of 10% is using 90% of each dollar of revenue to cover costs and expenses.
• D)Net profit margin indicates how much revenue is earned for every dollar of net income.

Understand the process and consequences of financing government deficits.

Grasp the concept and implications of fiscal years and how they relate to fiscal policy.

Understand the effects of government assistance and fiscal policy on unemployment.

Understand the significance of fiscal policy during different economic conditions (recession, inflation).

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Definitions:

Payback Criterion

A capital budgeting method that measures the time required to recoup the initial investment in a project.

Mutually Exclusive

Referring to events or choices that cannot occur or be taken simultaneously; selecting one option excludes the availability or selection of the other.

Payback Cutoff

The maximum acceptable period within which an investment should recover its initial costs, used as a criterion for investment decisions.

Net Present Values

The calculation of the present value of an investment's expected cash flows minus the initial investment cost.