VRM Cars Is a Custom Car Shop That Buys and Sells

question 5

Multiple Choice

VRM Cars is a custom car shop that buys and sells modified cars. It also provides customers with the option of adding more features to the models available in the market. In this scenario, VRM Cars deals in _____.

• A) intangible goods
• B) nondurable goods
• C) complementary goods
• D) durable goods

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Definitions:

Planned Debt

Borrowing that is anticipated and strategically used for business operations, expansion, or other purposes.

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings without needing to increase its financial leverage or equity financing.

Dividend Payout Ratio

The proportion of earnings that a company pays to its shareholders in the form of dividends.

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.