Assume That Allied Has Required Cicada to Not Handle Any

question 74

Multiple Choice

Assume that Allied has required Cicada to not handle any of Allied's competitors' products.Which of the following MOST strongly suggests that this arrangement is legal?

• A) The pricing demands of Cicada have forced many building suppliers out of business.
• B) Companies similar to Allied have demonstrated strong financial performance in recent years.
• C) Cicada often sells groups of homes to institutions that then resell them to individual consumers.
• D) In the past, Cicada and Allied were part of the same company.
• E) Monopolistic competition is encouraged by the government in some cases.

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses.

Equity Multiplier

A financial ratio that measures a company's total assets financed by its shareholders' equity, used to evaluate financial leverage.

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, indicating how much profit a company makes with its total sales.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.