During 2014, Rathke Corporation Reported Net Sales of $3,000,000, Net

question 292

Multiple Choice

During 2014, Rathke Corporation reported net sales of $3,000,000, net income of $1,440,000, and depreciation expense of $120,000. Rathke also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $960,000, and accumulated depreciation of $600,000. Rathke's asset turnover ratio is

• A) 3.0 times.
• B) 2.4 times.
• C) 1.9 times.
• D) 1.4 times.

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Definitions:

Sunk Costs

Expenses that have already been incurred and cannot be recovered or refunded.

Capital Investment

Funds invested in a business or enterprise with the intention of furthering its business objectives.

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

NPV

Short for Net Present Value, which is a financial metric used to evaluate the profitability of an investment or project, considering the time value of money.