Rate-Of-Return Measures

question 8

Multiple Choice

Rate-of-return measures:

• A) the sales returns and allowances experience.
• B) poor credit experience indicated by returned bounced) cheques from credit customers.
• C) how quickly first-time customers return to a store and make a second purchase.
• D) the financial soundness of a capital investment decision.

Understand how to compute necessary sample sizes for making interval estimates with unknown population standard deviations.

Relate the normal probability distribution's applicability to the binomial distribution through specific conditions.

Understand the effects of sample size and confidence levels on the margin of error and confidence intervals for population means and proportions.

Grasp the concept of level of significance (α) and its relation to confidence levels.

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Definitions:

After-Tax Profit Margin

A profitability ratio calculated by dividing net income after taxes by net sales, showing what percentage of sales translates into profits after all expenses.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate revenue, calculated by dividing total revenue by average assets.

Total Assets

The sum of all current and non-current assets owned by an entity, reflecting its overall value and financial strength.

Net Profit/Pretax Profit

The income a company has left after paying all expenses but before taxes; an indicator of overall profitability.