Which of the Following Would Best Explain a Situation Where

question 64

Multiple Choice

Which of the following would best explain a situation where the ratio of net income/total equity of a firm is higher than the industry average, while the ratio of net income/total assets is lower than the industry average?

• A) The firm's net profit margin is higher than the industry average.
• B) The firm's asset turnover is higher than the industry average.
• C) The firm's equity multiplier must be lower than the industry average.
• D) The firm's debt ratio is higher than the industry average.
• E) None of the options are correct.

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Definitions:

Hourly Wages

The sum of money received for every hour worked.

Exports

Goods or services sold by a country to foreign markets, generating revenue and contributing to national income.

NAFTA

The North American Free Trade Agreement, a treaty among the United States, Canada, and Mexico aiming to eliminate trade barriers and promote economic cooperation.

Economic Integration

The process whereby countries reduce trade and investment barriers among themselves, aiming to increase economic cooperation and interdependence.