If the Increase Income from Sale of a Nonrenewable Resource

question 31

Multiple Choice

If the increase income from sale of a nonrenewable resource in the current period is greater than the present value of income sale of the resource in the next period, the owner should:

• A)sell all of the resource now.
• B)wait to see what will happen in the future.
• C)sell all of the resource in the next period.
• D)sell some of the resource now and some in the next period.

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Definitions:

Par Value

The nominal value of a bond or stock as declared by the issuer, which might not correspond with its actual market price.

Profit Margin

A financial metric expressing the percentage of revenue that exceeds the costs of goods sold, indicating the profitability of a company's sales.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; it is calculated by dividing sales revenue by total assets.

Return on Total Assets

A ratio indicating the efficiency of a company in generating profits from its total assets.