Hilton Publishing and Jordan Publishing Have Identical Debt-Equity Ratios and Profit

question 14

Multiple Choice

Hilton Publishing and Jordan Publishing have identical debt-equity ratios and profit margins. However, Hilton's ROA is higher than Jordan's. Therefore, it must be true that:

• A) Hilton has a lower total asset turnover ratio.
• B) Jordan's ROE is higher than Hilton's.
• C) Hilton uses its assets more efficiently to generate sales.
• D) Hilton's operating efficiency is higher than Jordan's.
• E) Hilton has a lower investment in total assets than Jordan does.

---

Definitions:

Profit Maximization

This entails a firm's goal to achieve the maximum profit by adjusting its production and sales strategies.

Elastic Segment

refers to a section of the demand curve where consumers are relatively responsive to price changes, indicating that the price elasticity of demand is greater than one.

Total Revenue

The overall amount of money generated by a firm from its sales activities, calculated as the unit price times the quantity of goods sold.

Natural Monopolies

Industries where a single firm can supply a product or service to an entire market at a lower cost than any potential competitor, often due to economies of scale.