Use the Following Information for Questions

question 29

Multiple Choice

Use the following information for questions
For 2007, Colaw Company reports beginning of the year total assets of $900,000, end of the year total assets of $1,100,000, net sales of $1,250,000, and net income of $250,000.
-The rate of return on assets for Colaw in 2007 is

• A)20.0%.
• B)22.7%.
• C)25.0%.
• D)27.8%.

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Definitions:

Profit Maximization

A method used by firms to determine the best output and price levels in order to achieve the highest profit.

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a good or service.

Output Effect

The impact on total production and revenue when a firm alters the quantity of output produced, holding other factors constant.

Monopolist's Profit

The excess earnings a monopolist achieves due to the lack of competition, allowing for pricing above marginal cost.