Productivity in Service-Related Businesses Has Not Grown as Rapidly as in Manufacturing

question 3

Multiple Choice

Productivity in service-related businesses has not grown as rapidly as in manufacturing businesses because service businesses are

• A) More capital intensive
• B) More labor intensive
• C) Less labor intensive
• D) More expensive to operate

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Definitions:

Investment Turnover

A ratio that measures the efficiency of a company in using its investments to generate sales revenue, reflecting how effectively assets are being utilized.

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses like wages, depreciation, and cost of goods sold.

Invested Assets

Items acquired or bought with the intention of earning income or profit.

Profit Margin

A financial metric displaying the percentage of revenue that remains as profit after all expenses have been deducted.