In Words, What Does a Total Asset Turnover of 1

question 385

Multiple Choice

In words, what does a total asset turnover of 1.5 times mean?

• A) For each $1 of sales generated the firm has total assets of $1.50.
• B) For each $1 of total assets, the firm generated $1.50 in sales.
• C) For each $1 of total assets, the firm generated $1.50 in net income.
• D) For each $1 of net income generated, the firm has total assets of $1.50.
• E) The firm completely replaces its fixed assets three times each year, on average.

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Definitions:

Comparative Advantage

A principle that holds that each party should produce the goods or services for which it has the lowest opportunity cost relative to others.

Trade Restriction

Measures implemented by governments to control the amount of trade across borders, including tariffs, quotas, and non-tariff barriers.

Production Relationships

The correlations between input factors and the resulting output in the production process of goods or services.

Production Possibilities Frontier

A graph showing all the possible highest production levels for two or more products, given certain inputs.